Subscribe to receive this FREE daily commentary directly in your email
MAY 27, 2020
STOCKS – ROKU, MU, AMD, NVDA
MACRO – SPY, QQQ
MIKE’S READING THE MARKET PREMIUM CONTENT –
- DEALERS HOLDING THE S&P STEADY
- Topping Out?
- Trends Still Point Higher For Now
- Stocks Ready To Rally, Looking For Rotation?
- Global Rally On May 25
- Earnings Trends For 5.22.20
NASDAQ 100 – (QQQ)
The trading channel of the Nasdaq 100 is rather amazing. We get this 4 to 5% drawdowns rather quickly only to reverse right off the base of the channel. Today’s price action was beyond bizarre, and I’m not sure what to attribute it too, to be honest. The one positive piece of news that came out during the day was Micron raising guidance for this coming quarter.
There was a tremendous buy imbalance today at the close, worth nearly $3 billion it certainly helped to push the indexes higher in the last hour of trading. I talked about a few other things that may be at play here, regarding options and dealer positioning that is likely influencing much of this. Premium content – DEALERS HOLDING THE S&P STEADY
Until something changes with this pattern in QQQ, one has just to continue to respect it and trade it accordingly.
S&P 500 (SPY)
The S&P 500 was strong today, mostly because the banks continued to rally. It would have been a significantly different day had the banks not been so strong again. Is it real buying or short-covering, impossible to tell. For now, the S&P 500 continues to hold just below the April 3 uptrend. The RSI also finally broke out of its range, confirming the move up, and likely suggests that momentum can continue higher for a bit longer. It seems like for whatever reason that 3,100 appears to be the level the market wants to hit. Currently, we are trading at 17.9 times 2022 earnings estimates of $170 per share, an insanely high level for 2-year forward earnings estimates.
Micron (MU)
Micron raised its guidance today rather significantly, with earnings now in the range of $0.75 to $0.80 per share, versus consensus of $0.56. Meanwhile, revenue guidance rose to $5.2 billion from $5.4 billion, versus estimates of $4.92 billion. However, they did note; they were uncertain they could sustain the momentum into the fiscal fourth quarter, due to the coronavirus. Still, shares jumped to resistance at $49.80. That fills a gap that was created on March 9, and so now the stock needs to break out. If it can great, it probably goes up to $52.75.
Roku (ROKU)
Roku did fall today as well, to around $101, right near the $99 to $100 level I laid out earlier this week. Close enough for me. Momentum is still lower based on that RSI, and a break of $99 sends it to $90. It seems possible. I will have to think more about it.
Nvidia (NVDA)
Nvidia was hit pretty hard but managed to hang on to support at $317. For now, momentum is higher, but I’m not sure for how long. Tomorrow will be telling.
AMD (AMD)
AMD touched support at $49.15 and bounced hard. Even with the bounce, momentum is still lower. Probably will test that level again.
Anyway, that’s all
-Mike
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 results.
Subscribe to receive this FREE daily commentary directly in your email
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.
Rising Inflation Signals And Tariff Uncertainty Set Stage For Volatile Summer
Mott Capital's Market Chronicles 24 hours ago