It A Manic Monday For Stocks, Giving Back All The Big Gains

It A Manic Monday For Stocks – Starting High, Finishing Low

12.14.20

Stocks – AVGO, AMD, NFLX, MO

Macro – SPY

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The S&P 500 finished the day lower by almost 50bps, after gapping higher by as much as 1% to start the day. It marked a 1.35% reversal from the peak to finish the day at 3,647.

I’m not sure if there was really any news that changed anything, but some blamed it on new fears of lockdowns here in the US. To this point, the market has never cared about new lockdowns. The reason for the turn lower really doesn’t matter much.

Overall, the index failed right at resistance around 3,700, filled the gap, and pushed lower. Again, as noted in my video from this weekend, 3 of 3 paths I mapped out suggested further decline for the short-term. Whether this is the start of something severe or not is too early to know. (Subscriber only video – Three Potential Paths For The S&P 500 Over The Short-Term- The Week Ahead – First two weeks are free to try)

AMD (AMD)

AMD got an after hour price target bump from Goldman, which pushed its target to $110 from $96 due to expanded market multiples. Yeah, sure, whatever. Regardless, the stock is getting close to breaking out of its trading range. We won’t know for sure until tomorrow, and it will take a close above $96 to confirm that break out.

Netflix (NFLX)

Netflix has filled the gap at $525 and based on that, the stock should resume its trend lower. The RSI is trending lower as well, suggesting a return to $495.

Broadcom (AVGO)

Broadcom rose today and tested the breaking of the uptrend, and failed. It should result in the stock trading lower back towards $400, as noted yesterday.

Altira (MO)

Altira may be breaking out; the stock appears to have formed an inverse hand and shoulder pattern, while breaking resistance, and a downtrend around $42, three bullish indicators. If the stock can hold on to $42, I think it has a chance of going to $47.

Have a good one

-Mike

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