Stocks – MO, AMZN, AMD, NVDA, T
Macro – SPY
- RTM Week Ahead: Stocks Return To Pre-Pandemic Valuations
- Driving Subscriber Value – New Enhancements
- S&P 500 Futures Fail At Resistance – A Potentially Negative Sign
- It Is Quad Witching & Tesla Inclusion Day- Watch Out
- Stocks Stall At Resistance – Midday
- APPLE Seller Turns Buyer- Morning Note
It will be a holiday-shortened trading week, with the equity markets closing early on Thursday and shut on Friday. Therefore, it isn’t expected that there will be much in terms of economic news. It may also mean potentially light volumes, although I’m not sure that will be the case this time around with everyone working at home for months.
S&P 500 (SPY)
The S&P 500 managed to finish slightly lower on Friday, dropping by 35 bps. The bigger news is that the index managed to finish below the previous highs to close around 3,709. This was below the prior resistance level around 3,715.
Additionally, we have seen the RSI reverse lower, indicating a change in trend may be underway. It doesn’t mean the index can’t rise from here; if it does, it will likely be a very short-term gain with a pullback the more likely outcome over the next few weeks. Potentially placing us in that that 3,200 to 3,300 range. Is this likely to happen this week, no? But is likely to happen over the next few weeks, yes. (Subscriber video – RTM Week Ahead: Stocks Return To Pre-Pandemic Valuations)
The number of stocks above their 50-day moving average in the S&P 500 is around the upper end of the trading range at nearly 85%. Typically we don’t see this number climb too much higher levels.
I explain more in this week’s subscriber video that the most shorted stocks had a bad week for the first time in a while and failed to make a new high.
Amazon’s overall patterns are concerning to me, and I tend to think that its inability to push higher during a period where the market has been rising says something. I tend to think as a negative indicator and that the stock’s next major move in the shares will be lower. Additionally, the momentum in the RSI continues to move. I still that over the next few weeks, we will see Amazon head lower towards 2,870.
AMD has been a tough stock to work with; it has received a few price target boosts over the past week, and still, it struggles to push higher, stuck around the $96 level. Short-term, I think it has a high likelihood of dropping back to $87, with a medium-term risk of falling back to $75. My view remains unchanged.
Nvidia has struggled like AMD. It is currently sitting on an uptrend, and you can notice volume has been picking up more recently on down days. Perhaps it is a sign of more selling coming to the name. I still think the stock is heading towards the support price of $460 over the next several weeks.
AT&T reached resistance around $31.80, filled the gap has reversed lower now. $28.90 is the next level of support to watch for. This may come sooner than later. The stock is coming off very overbought levels.
Altria has been battered this year, and I noted a few days ago in a midday write-up I thought the stock was going on higher off of the reverse head and shoulders pattern to $47.20. Again, this is likely to take some time, but it looks like a bullish setup.
Anyway, have a great weekend.
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