Stocks Are Trying To Break Out On June 19

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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June 19, 2020

STOCKS – AAPL, ROKU, BABA

MACRO – SPY, EWG

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL

Being in the business of trying to predict the future is not easy. So far, today isn’t going according to the plan I drew out last night, but such is life. The S&P 500 futures are moving higher today by about 90 basis points. The index is trying to break out at this point from the downtrend that started on June 10; if it can close above that downtrend, there probably isn’t much that can stop it from rising back 3200. 

The problem is, it is hasn’t officially broken out yet, so we shouldn’t get too excited about the potential for further gains. Currently, the ES is basically on the downtrend and trying to push through. 

Further, the SPY hasn’t even broken the downtrend yet. So this is somewhat critical because the $314 level has been very stiff resistance for the ETF. The significant headwind today is quadruple witching and the S&P 500 rebalance. Again, if the S&P 500 can break the downtrend, it could rally rather sharply. So we can watch the ETF for a breakout, but still, it needs to break that $314 region and close above it. If it can’t, then no, break out, and it likely means we continue to grind lower. 

Again, as I noted last night, we are going to see a big move today, and to this point, it seems like we may get that. The question is which way. My thought yesterday was that the trends were lower, and that wedge pattern forming was a continuation of the downtrend.  To this point at least, it seems the market disagrees with my thought process.

Germany (EWG)

Germany is trading higher this morning, too but is struggling to break out and has stalled at resistance at 12,460. 

Roku (ROKU)

Roku has seemingly come back to life, and the stock is seeing some bullish momentum, with a rising RSI. The stock is trying to break out at $128, and I think it can, pushing to $135 next. 

roku

Alibaba (BABA)

Alibaba will get a boost after its price target was raised to $270 from $260 at Barclays. I have been seeing some bullish betting in this one at the start of the week. For now, $231 remains the next level of resistance. alibaba, baba

Apple (AAPL)

Apple had its price target raised to $405 from $370 at Jefferies today on the promise of 5G. The stock is overbought and overvalued at this point, but investors appear to be drawn to it for its balance sheet and potential for future growth. The next meaningful stop could be around $372. 

appla, aapl

Well, good luck today, we have Jay Powell speaking, Quad witching, and S&P 500 rebalance. It likely won’t be boring, with most of the action on the opening and closings. 

-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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