July 6, 2020
STOCKS – SQ, TSLA, UBER
MACRO – SPY, QQQ, FXI
Mike Reading The Markets Premium Content – $35/Month or $300/Year
- 3 Keys To The Week Of July 6
- Square May Drop By As Much As 20%
- Earnings Trends – 7.4.20
- Fed’s Balance Sheet Falls, Stocks Stall
- Lucky 7?
- Testing Resistance/Reducing Tesla -Midday
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TESLA
S&P 500 (SPY)
Stocks are advancing on July 6, moving to the top end of their recent trading range as they attempt to break free of what’s been a hard-fought battle at resistance levels around 3150 on the S&P 500.
Currently, the futures are trading around 3164, which is the highest level the futures have traded at since June 11. The big question is if we can close above these levels. A close at the current levels or higher would be a big win for the bull and suggest there is some further upside in this market, with the next significant level not coming until 3,195.
We get the ISM non-manufacturing report at 10 am, and that is a very big readout, considering the economy is about 80% services.
The Qs are also rising today and pushing towards the upper end of their trading range to what could be a new high. The only thing I will note is that every time we reach this top end of the trading channel, we generally see a drawdown to the lower end of the channel. The channel remains perfectly intact.
Copper prices continue to melt-higher and have seen minimal interruption. Copper may be the most critical indicator to watch as the weeks begins.
Shanghai had a powerful trading session rising nearly 6%, which is helping to fuel the global rally. A jump beyond 3,350 pushes the index up to 3,495.
Square received a price target boost today at Suntrust, which increased its price target to $150 from $83. The stock is trading at the upper end of the channel, and I saw some bearish betting last week, which indicates the stock falls below $100, but not until after the company report results. So we can watch and see if it jumps above $118.
Uber is rising today on reports it is going to by Postmates for $2.65 billion in a stock deal. I’m surprised the stock is trading higher today because the deal would be dilutive to Uber holders as an all-stock deal. Also, I wonder what this means about Uber’s future? Is this a company that is now focusing on food delivery and slowly shifting away from ride-sharing. The $33.15 is a big level of resistance for the stock. If it can advance beyond that price, then it has room to run to $35.90.
Tesla is rising this morning after JMP raised its price target to $1,500 from 1,050. Now all the attention will shift to the second-quarter results and whether the company can turn a profit and get S&P 500 inclusion in the process. I reduced my holdings in Tesla last week a bit, taking some profits. I have held the stock for the past six years, and it became my largest holding by a too wide of a margin. I’m still very long, though…Testing Resistance/Reducing Tesla -Midday
That will be all.
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.