May 30 – Stock mentions: AAPL, AMZN, INTC, TSLA, V,
Michael Kramer and the clients of Mott Capital own AAPL, V, TSLA
- S&P 500 Futures +12 points
- US 10-Year 2.26%
- VIX 17.23
- Oil $59.13
- Dollar Index 98.12
- China Shanghai -0.31%
- Hong Kong HSI -0.44%
- Japan Nikkei -0.29%
- South Korea KOSPI +0.77%
- UK FTSE +0.45%
- Germany DAX +0.59%
Perhaps there are at least signs emerging that the global markets are stabilizing. While the US equity market has drifted lower, markets overseas continue to show a bottoming process, especially in China. We can see that the Shanghai Composite has managed to stabilize between 2,825 and 2,920. Overall, the RSI for Shanghai continues to trend higher longer-term, and we can begin to see that shorter-term the RSI is now starting to rise.
The Semis appear to have a pretty solid correlation to that of the Shanghai composite, and perhaps the two are a signal the broader sell-off may be entering or has entered its last phase down.
S&P 500 (SPY)
While of course, there is a strong correlation between the Semis and the S&P, one can also see the divergence between the semis and the S&P 500 had in the middle of the summer. That, of course, looking back on things may have been the canary in the coal mine at the time.
The levels to watch for the S&P 500 today come at 2,768 and the 200 day moving average around 2,770.
For the semis, the most critical level for the SMH is at $96.50.
Perhaps the days of Tesla’s free-fall are coming to an end. We can see that the stock has held around the $190 level for the last few trading session, and now it would appear a falling wedge pattern is forming, suggesting a climb back over $200 towards $210. I still think there is upside to $250.
Amazon has been a reasonably quiet stock in recent weeks, but that may be about change. The stock has held support firmly around $1800, and the pattern in the stock suggests that the stock rises. The shares could be approaching a break out that sends it back to $1850 and then potential higher towards $1900.
Intel has held firmly above $42.50 and that continues to indicate to me rise back to $46.
Visa appears to have formed a bullish rising triangle. An increase above $165.80 sets up a move towards $173.
Finally, Apple may be the biggest bell weather of them all when it comes to the risk of the trade war. As I noted yesterday, there is a falling wedge in the chart, and it suggests AAPL rises perhaps back to $182 for starters.
Good Luck today!
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