The Week of February 4
Michael Kramer and the clients of Mott Capital own Disney, Skyworks, Alphabet
It will be a rather calm week as earnings wind down and economic news is sparse. It should help the S&P 500 continue its rally, with the housing and semis stocks still in focus. Should the S&P 500 rise above 2,716 it could go on to rise to 2,794
Housing Sector (HGX)
The housing index is on the rise, breaking out early last week. Now the index is heading towards a downtrend and resistance around 290. It sets up what could be a big test for the index and the market. Remember it was back on Christmas day that I put a commentary out noting the relationship between the HGX and the S&P 500. This Is The Sell Signal That May Have Tanked The Stock Market
The semis have also broken out with the SMH rising above key resistance at $96.50. Now the ETF appears to be heading towards resistance at $101. I bought the SMH March 15 $100 calls for myself late last week, for full disclosure.
The Biotech XBI is also nearing a potentially big break out should it rise above technical resistance at $85.25; it could increase to nearly $90.
Alphabet (GOOGL, GOOG)
Alphabet reports results on Monday. The stock is nearing a break out at $1,120 which could result in the shares rising to around $1,170. The RSI has been steadily trending higher, and that too would suggest that the stock may continue to increase.
Gilead reports results on Monday as well, and for now, $72 appears to be the limit of the stocks potential to rise. $72 has been a significant level of technical resistance in the past.
Seagate reports on Monday afternoon too, and this one is also nearing resistance at $46 which could send the stock higher to $49 should it break out.
Disney reports on Tuesday. The stock has gone nowhere since 2015, consolidating for nearly four years. The stock did break free of a downtrend and is trending higher. But it has faced stiff resistance at $116.50. For now, the upside seems limited to $120.
EA reports on Tuesday, and an increase above $92.50 could send the stock higher towards $102. But resistance at $92.50 has been strong; it is going to take a big earnings beat to get shares moving higher. The RSI is suggesting shares fall, and not rise. Be careful here.
Skyworks reports on Tuesday, and this one already broke out rising above resistance at $71. There is a gap to fill up around $81. The downtrend in the RSI also broken and this one looks like it could be heading back to $81.
General Motors (GM)
General Motors reports Wednesday morning, and the chart suggests the stock may be heading lower. There is a rising wedge pattern which indicates a bearish reversal. Additionally, $39 has proved to be a severe level of resistance, with a gap to fill around $35. Seems highly likely that the stock refills that gap around $35 this week.
Twitter reports Thursday afternoon, and there seems to be a reasonable chance that stock can reach $36.50.
That going to be it. Good Luck this week.
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