Stocks Fall As Trends Begin To Show Signs Of Shifting Short-Term

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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January 21, 2020

Stocks – NFLX, ROKU, SHOP, BA, MU

Macro – SPY

Michael Kramer and the clients of Mott Capital own NFLX

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S&P 500 (SPY)

Stocks had a down day with the S&P 500 falling by roughly 25 bps, and closing around 3,320. But more important is how the index managed to struggle around resistance in the 3,325 to 3,330 region. The big question will be what happens at the uptrend, also known as the upper side of the rising wedge, with the potential for the first test of support around 3,300.

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I noted on the mid-day update to be careful that it appeared the market was merely filling gaps, and it looks that is what happened today. So we need to be cautious because there are several signs that suggest a change of trend may be occurring. Premium content – Get the first two weeks for free Market Filling Gaps? Cancel if you hate the service!

S&P 500, spy

Netflix (NFLX) 

If the competition of streaming media services is hurting Netflix, they sure didn’t show up in today’s results with net additions of 8.7 million. The only reason I think the stock is trading slightly lower is that the guidance for the first quarter came in lower at 7 million. But the first quarter historically is the best quarter of the year for the company, so we will have to wait to see if they are low balling their guidance. Anyway, I thought the results were good, and the company is projecting, easing negative free cash flow for 2020. Nevertheless, the stock seems to be hardly responding. These results certainly didn’t make me grow more bearish so my view of its rising to $360 hasn’t changed.

netflix, nflx

Roku (ROKU) 

Roku increased by about 5% to finish the day around $136.75. My problem is now the stock is right on that trend line, and that doesn’t make me feel too great. It tells me we find out a lot tomorrow, in terms of what is next for this stock.

netflix, nflx

Shopify (SHOP) 

Shopify was up sharply rising by around 2.5%. However, the stock looks like it may be ahead of itself, and I noted on the midday commentary today, that I thought the stock was likely heading lower to around $420.

shopify, shop

Boeing (BA) 

Boeing finished the day below $317.50, and that has been an important level of support in the past, and now it is broken. The trends appear to suggests that the stock continues to move lower perhaps to $297.

boeing, ba

Micron (MU)

Micron had a good day closing above resistance at $58.65. It is a good sign and could be a sign that the stock is finally getting ready for the stock to make that move to $61.40.

micron, mu

Until Tomorrow

-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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