Stocks Are Pointing Lower On July 24 As Momentum Trade Unwind

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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July 24, 2020

Stocks  – SHOP, INTC, AMD, AAPL

Macro – QQQ, 

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL

Stocks are trading mostly lower on the morning of July 24, following more rising tensions between the US and China. It is resulting in the S&P 500 SPY ETF is falling 25%, and the NASDAQ QQQ ETF is falling by 80%. Markets in China were weaker, with the Shanghai index falling by 3.9%. It means that the sell-off we saw yesterday in the NASDAQ is at least expected to continue at the start of trading. 

NASDAQ (QQQ)

For now, the QQQ ETF is trading around $255.50, bringing the ETF to the lower end of the trading range. Now to this point, every time the Nasdaq has fallen to this end of the trading range, it where we have seen the index bounce. At this point, it is hard to say what will happen. The key here is holding and maintaining the uptrend; if Qs the close below the uptrend, around $252, it will likely signal a deeper sell-off.

Copper

One worrisome trend is that copper fell below its uptrend and is now trading at $2.89. 

The Yields

The 10-year yield fell to and tested support around 55 basis points. Again this is a significant level that must hold. 

Apple (AAPL) 

Apple is now trading below its uptrend for the first time since this whole bull rally started. So it is a rather significant breakdown. If the stock can’t hold on to $367, it could have further to fall, potentially to $348. 

Intel (INTC)

Intel was getting crushed this morning following its results last night, and it appears that the stock is heading to $50.25. 

AMD (AMD)

As a result of Intel’s problems, AMD is rising sharply. The stock broke out on Wednesday and retested that break out on Thursday. I have to think about where the stock can go, but the significant level of support is at $59. 

Shopify (SHOP)

Meanwhile, Shopify may come under pressure should it fall below $910. The next significant level of support would be around $850. 

-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.  

 

 

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