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Banks Bounce, Apple, Gilead, Amazon, Netflix – The Daily Rundown For July 9

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF APPLE AND NETFLIX

That is the third straight day that the S&P 500 put in a solid gain, finishing up almost 90 bps, and placing the index within 16 points of 2,800 and it may set up an exciting day tomorrow. The one thing we do not want to see the index do is to fail at these levels. Instead, we will want to see it push through 2,800.

Banks

The banks were a big part of today’s rally. The Financial ETF (XLF) managed to push higher, but the sector is not out of the woods yet. The significant level to watch is that red trend line, which for now is around $27.50 to $27.75. If it can rise above that downtrend then the story changes, but until that happens, the trend is still lower.

JP Morgan’s stock got right up to resistance around $107.50, and that is where it stopped going higher, and I think it is crucial to note.  If it can continue to rise to tomorrow, the stock has room to increase to about $110, before hitting its next wall of worry.

Bank of America, the same as JPM. Rising right to resistance near $29.20, and stopping.

Should we suddenly be all excited to see the banks have a big day, of course! They are significant contributors to the broader indices, and if they can rise it is a substantial positive for stocks. But still, one day is not a trend, and I’m not convinced enough has changed since Friday. In fact, nothing has changed since Friday.

Technology

Moving to technology, the XLK ETF managed to rise back above resistance at $71.30, a big positive for the group.

Apple is starting to look strong again. The stock has acted well of late, and for now, the trend continues to be higher.

Amazon looks dangerous here, to me. The stock has fallen out of its rising wedge, and that is bearish. Shares may rise to $1,760 in the coming days. But that chart doesn’t look right to me. Maybe I’m just overly cautious, but that is what it looks like from my point of view

Netflix keeps going; the stock got yet another upgrade, today from Barclay raising its target to $450. There is a lot of positive momentum going into these results and for obvious reason.

Biotech

Biotech got walloped today after President Trump made some comments about drug pricing, but the stocks managed to bounce right back. The IBB is very close to breaking out, and should it rise above that downtrend line; the group goes much higher.

Gilead cleared a key hurdle at $76.60, and can most like continue on towards $82.

Final Thoughts

Earnings will now take center stage, and there will be a lot of weight on the success or failure of those results. The market needs a strong earnings season to maintain the bullish momentum. Without strong earnings, there will be very few reasons for investors to stick around this summer, especially given the uncertainty regarding trade and interest rates, then factor in the mid-term elections this fall. Strong earnings growth has helped to keep the valuations in the market at reasonable levels, and that has contributed to support prices, and if that should change, then the whole dynamic changes.

That will be all.
-Mike

PHOTO CREDIT VIA FLICKR

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

#Banks #jpmorgan #bofa #apple #netflix #amazon #earnings