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For the week of May 28 – Stock mentions: INTC, MSFT, NVDA, FB, SBUX
Michael Kramer and the clients of Mott Capital own MSFT
It will most likely the week of May 28 will be rocky for stocks, with headlines driving the direction of trading. At this point, it would seem the fundamentals of the market will not matter. What matters most is sentiment and technicals. It makes the end of last week of particular importance since the S&P 500 managed to finish the week above the May lows.
S&P 500 (SPY)
It leaves two levels as the most important as we start the week, 2,800 and 2,836. A drop in the index below 2,800 could spell trouble indicating a much steeper decline is on the way. A rise above 2,836 the week of May 28 would allow the index another chance of breaking the downtrend we are currently following lower.
The Russell 2000 is also important to watch after it dropped to and held support at 1,492. I think it sets up a move higher to 1,521.
Intel needs to be watched closely, as this was one of the first semis that started to fall in April after earnings and the before the tariff worries. It managed to rise on both Thursday and Friday. An increase for INTC above $46 would be positive for the stock, the sector, and the market. (Premium article: Chip Data Suggests A Bottom Is Near)
Despite the adverse market, Microsoft has held up very well and appears to be towards the end of a bull pennant. It would indicate that the stock could rise, my prediction is to around $140.
Facebook looks as if it has formed a descending triangle, and that means FB is likely to fall this week perhaps to $173.
I don’t predict that things will improve for Nvidia this week either, with the potential for NVDA to fall to around $139.
Starbucks has a lot riding on China, and for now, investors don’t seem to mind. However, the uptrend is broken, the RSI is trending lower, and the SBUX looks poised to drop to around $72.
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