Amazon, Exact Sciences, and Bitcoin Are Poised To Fall – Daily Commentary
Like I said yesterday, the S&P 500 was nearing a breakout, and it did today rising over 2,807, closing at 2,810.
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After having a mild pullback yesterday, Tesla is making its assault on $350 and appears once again ready to break out. The trend in Tesla continues higher, as news spreads of the Model 3 making its way to the east coast showrooms.
Shares continue to act extremely well despite the negative news flow, and with earnings for the company likely around the corner, I’m not sure that it will get any better. The company is yet to announce when that day will be, but inevitably the burn rate and cash will be the key.
The chart below shows how short interest had been steadily increasing over the past several weeks, but has now started to decline.
Exact Sciences shares continue to stall out below support at $49.25, and the longer they start below support, the more likely it becomes for the stock to keep moving lower. The news the other day about the new liquid-screening test for Colon Cancer, even thought in the development phase, has rattled the market.
But for now, as the chart below shows, revenue estimates have continued to trend higher, with no evidence that analysts are starting to trim the outlook. So perhaps the market is just rethinking the current valuation for the company. We will need to continue to watch this.
Morgan Stanley shares have entirely busted out, rising well above resistance at $55, after reporting solid results. Shares could be well on their to $70
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Amazon shares look set to fall, with the stock falling through its uptrend, and has a relative strength index reading at 76 on the daily chart. A decline to 1,190 would be about 5 percent from its current level. A fall to 1,250 offers a support region and is only a 3 percent decline. With the stock going into earnings I couldn’t see it falling 5 percent but could come into play after earnings.
Bitcoin continues to fail at 11,800; it just doesn’t have enough juice left. The volume is drying up, and the RSI is heading lower. Not a good sign or setup for Bitcoin here.
Ten-year yields are now at 2.65 and seem heading even higher. 3 percent is coming.
That’s it. See ya!
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Michael Kramer and the clients of Mott Capial own shares of Tesla
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