October 25, 2020
Stocks – AAPL, MSFT, AMZN, FB, SHOP, AMD
Macro – SPY, SMH
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFT AND APPL
It will be a busy week driven by politics, stimulus hopes, and economic data. It is becoming clear that market enthusiasm for a pre-election rally is holding, but it will need more positive headlines around stimulus to push higher.
S&P 500 (SPY)
The chart still appears to be favorable to stocks rising based on the pattern present. It would suggest that we see higher prices from here, with a run-up to around 3,600.
The setup for the SMH ETF appears to be bearish, and I think this one is heading lower. Add to that a massive put position in the ETF that was created last week, and I think we will see $174 in the weeks ahead. (premium content – Betting Semis Drop)
Apple will report results this week. The stock filled a gap around $115, and now I think that falling wedge is telling us that the stock rallies back to $125.
Microsoft will report on Tuesday night, and the stock has been holding a short-term uptrend nicely. I think this one will head higher and work to fill the gap up around $231.
AMD will also report results on Tuesday. I know many people think that Intel’s pain is AMD’s gain, but perhaps there is just a slowdown across the space that is now taking place. It’s certainly possible. We won’t find out until AMD reports. I can tell you the stock surely doesn’t act well. I think it continues lower towards $75.
Shopify will report results on Thursday morning, and the company really has an amazing product. But the valuation is just so hard to grasp. A stock like Shopify should rally into results, not declining. Watch for this one to head towards $850 after results, just not liking the pattern or momentum loss.
I think Amazon will report on Thursday that are good enough results to send the stock higher, back to around $3,485.
Facebook will also report on Thursday, and again, like the others, I think the results will be good enough to get the stock moving back to its highs around $303.
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