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Stocks Are Tired and Overbought, They May Soon Pullback
It's actually an OX, is that the same thing?

Stocks Are Tired and Overbought, They May Soon Pullback

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.

Otherwise, enjoy the column!

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November 5

Stock mentions: MU, SPLK, SNAP, SHOP, GILD

MACRO- SPY, SMH

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SPLK

S&P 500 Look Worn Out

Stock’s had a day, and that could be because the S&P 500 (SPY) is simply running out of steam. There are a bunch of gaps that needed to be filled on the chart, and maybe its time for those gaps to get filled. The first significant gap comes at around 3,060, and then another at 3,030. It is undoubtedly nothing serious by any means, but it is worth noting and would at least suggest to me that patience is needed in the days ahead, and chasing stocks higher at this point may not be wise.

S&P 500, spx

Stocks Above Their 50-Day

Again, the number of shares above their 50day moving average continues to be at the very high end of the range, and it too supports the notion that a short-term pullback is in store.

50 day moving average

Semis Are Toppy

Semiconductor stocks also look overbought at current levels, with an RSI at 70 and declining levels of volume. It suggests to me the SMH is likely to pullback perhaps to around $129.

smh, semis

Micron Stands Out

I did note today that Micron (MU) is starting to see some bullish betting suggesting that MU rises into the low to mid-’50s. The chart is supportive of such a move too. The stock appears to have plenty of technical support in the $48 to $48.75 region.  Premium content: Micron Is Breaking Out

micron mu

Shopify Looks Ugly

Shopify (SHOP) does not look healthy to me at all. I talked about today in the mid-day audio file. But the most glaring thing on the chart is the rising volume the last two days as the stock as fallen, a telltale sign of sellers stepping into the name.  I’d be careful, $285 may be closer than you think. Premium content: Momentum Stocks Are Under Pressure

shopify, shop

Snap’s Post Earnings Run Is Over?

Snap (SNAP) did not have a good day falling by about 3.5%. SNAP hit resistance and is now at risk of declining. I did observe some buying of the November 15 $13 puts. It seems like a long-shot on the surface, and more like a cheap directional bet, the stock falls. Snap’s stock can move quickly, as we all know.  $13.60 is the next significant level of support.

snap

Splunk Nears A Big Break Out – I Own

Splunk (SPLK) is very close to a big break out at $123 that could get the stock moving back to $133.  Again, I talked about this one earlier today. Premium content: Momentum Stocks Are Under Pressure

Splunk, splk

Gilead Looks Very Sick d

Gilead (GILD) continues this never-ending period of consolidation. The good news is the days are number. The triangle is converging, the downtrend and the support level will soon meet. I’m scared for $56.

gild, gilead

Have a good one

-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.