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MONSTER STOCK MARKET COMMENTARY
February 14, 2021
STOCKS – AAPL, AMZN, ROKU, ZM, XOM
MACRO – SPY, UVXY, VIX
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- T.W.A – Does Volatility Lie Ahead?
- Midday: Big Move Coming One Way Or The Other
- Apple’s Stock Sees A Big Bearish Bet
- Cisco Could See Lower Prices After Results
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN APPLE
Stocks finished last week strongly, despite struggling around 3,900 all week. A massive $3 billion buy imbalance appeared in the final minutes Friday afternoon that sent the S&P 500 sharply higher to finish the day out up 65 bps to close at 3,931.
From a technical standpoint, there really isn’t much that change for the S&P 500, with the upper level of resistance still on the trend line around 3,950. I still contend that we will likely see a drawdown back to the lower trend line around 3,800.
VIX
My view comes from the fact that I believe the VIX is at the bottom of the range at 20 to 22 and that we are more likely to see the VIX move higher than lower from this point, which is likely to pressure equity price down.
Oddly, despite the VIX dropping on Friday, the VVIX – which measures the implied volatility of the VIX, finished the day higher, a rare divergence.
Additionally, we haven’t seen the implied volatility levels in the overall market break to new lows yet. In fact, they remain well above the pre-pandemic levels.
VIX ETN (UVXY)
Some strange options positioning is occurring in the UVXY, a short-term VIX ETN. Open interest levels have risen to historic highs, specifically on the call side; I talked more about it in this week’s look at the week ahead column. This is notable and worth watching. (For members of Reading The Markets, 20% off this weekend- The Week Ahead – Does Volatility Lie Ahead?)
Apple (AAPL)
Apple continues to be uneventful as the stock has been able to resume its upward movement despite robust quarterly results. The stock closed right on the uptrend, and I noted early this week there was a sizeable bearish bet placed in the options market against Apple. A break of the trend line around $133 likely triggers that decline with the next support level around $127.85, then $120.
Roku (ROKU)
Roku will report results this week, and I think it has completed a 5 wave upcycle, indicating a drop back to the lower trendline at $420. Additionally, I noted, in what should be a free article, that there was a bet that the stock falls in the weeks following results. (Should be free to read- Roku’s Results May Fail To Live Up To Massive Expectations)
Zoom (ZM)
Zoom has been steadily climbing and is likely to refill the technical gap around $478.
Exxon (XOM)
Exxon is probably not finished rising either, especially with oil prices climbing. There is a healthy uptrend in the stock, and a push above $51 likely sends the stock higher towards $53.70.
Amazon (AMZN)
Amazon has been trending towards the upper end of its trading range of 3,065 to 3,380. However, that trend now appears to have broken, and that could result in the stock heading back to the side of the range at 3,065.
Have a good one!
-Mike
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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