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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APRIL 13, 2020
Stocks – TSLA, AMZN, ROKU, AMD
Macro – SPY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TESLA
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Here are some recent titles:
- Stocks Fall With The Potential For More To Come – Midday
- Seeing A Lot Of Bearish Options Betting – Morning Commentary
- Getting Ready For Earnings Season – The Week Ahead
- Short-Term Rally May Be Coming To An End
- Stocks Rally But Some Sectors Are Critical Spots
- Big Bets Nvidia’s Stock Drops
S&P 500 (SPY)
Stocks fell on April 13, with the S&P 500 finishing lower by about 1%. It wasn’t a news-driven day, and the market did a reasonably good job of holding support at 2,735. We did manage to move below the rising wedge pattern we have been watching; however, at the moment, it appears any real damage has been avoided.
Tomorrow we will start hearing earnings from the banks and companies like Johnson and Johnson and many others. Nobody is expecting them to report strong first quarter earnings. Also, it seems hard to imagine they will provide any sort of meaningful guidance for the second quarter, and will likely pull 2020 guidance if they haven’t already.
Most people are assuming this year is a washout and it is, I think what may matter is the length of time it may take for some of these businesses to recover. If you look at some of the banks, analysts are not looking for earnings or revenue to return to their 2019 levels until after 2022. That is a pretty profound impact. So how long it takes to get back to where many of these companies were, will be important.
My earnings estimates continue to fall for 2020 and 2021, and I expect them just to fall further. The general trend for the S&P 500 is still higher at the moment, with a drop below 2,730, likely setting up a decline to 2,650. I still think there is a reasonable chance we refill the gap at 2,450.
Tesla rose sharply today, by over 13.6% and is continuing to rise after hours. I’m not sure what caused the stock to have such a big surge. The stock is now trading just below resistance at $682, and the RSI is still trending higher, so perhaps it can push to $720.
Amazon jumped today on a report the company may start allowing third parties to sell non-essential items again. The stock jumped and nearly touched its all-time highs. This is a pretty interesting spot for the stock. Believe it or not, the stock is almost overbought, with an RSI approaching 70. Maybe, it settles out and trades lower towards the bottom end of the range at $2,000.
Roku is jumping after hours after announcing a better than expected revenue range, 39.8 million active accounts, and 13.2 billion streaming hours. It doesn’t sound that great considering the circumstances. There is a level of resistance around $110, so maybe it’s best to see how this one shakes out before getting too excited.
AMD is at an essential level, and if it clears $50.90, it can fill the gap up to $53.
We will see what happens tomorrow
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