Stocks May Be About To Race Higher

Stocks May Be About To Race Higher – The Daily Commentary

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Michael Kramer and the Clients of Mott Capital Own NFLX

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S&P 500 (SPX, SP500)

The stock market continues to mend itself, and today the S&P 500 took another big step in the right direction. The index cleared a significant technical hurdle at 2,752. That may help to set up a rise to 2,794 on the index.

spx, sp500

Russell 2000 (RUT)

The Russell 2000 is also set up very nicely. It put in a big triple bottom between October 24 and 29. Now it is trending modestly higher and looks like it ready to pop higher. There is a rising triangle pattern in the chart which is also bullish.  An increase of around 2% to about 1,590 is in the works.

russell 2000, rut

Yields 

Ten-year yields are running into some trouble at the top end of the range here. Again, inflation rates remain in check for the most part, and I see no reason for rates to continue to rise on the 10-year. I think the long-end of the curve is heading lower.

10year

Oil

Have you seen oil? I mean who’s the only guy around who got Oil right twice in the same year? Yeah, me! I told you at the end of last year it was going to about $75. Then I said over the summer it was going back to $61. Nice!.

Momentum continues to come out of commodity and should break below $61; I think the trend line at $58 comes back into play.

 

oil

Dollar 

As long the dollar continues to strengthen then oil shall continue to sink. My expectation is for the dollar to continue to increase, especially if the Fed continues on its crazy path of raising rates on the short-end of the curve.

dollar

Let’s move on to stocks.

Micron (MU) 

I had grown more positive on Micron, but now I’m flipping back to being bearish. The stock has an awful lot of headwind in front of it for 2019.DigiTimes had an article out today talking DRAM prices falling by as much as 20% in 2019.  There is also a lot of bearish put positions out there for January expiration. The stock is really struggling to get over resistance at $40.25.  Can the stock pop to $42, sure, but I’m not sure there is much room to rise from there.

micron, mu

Semis (SMH)

I’m watching the semis very carefully again. The SMH ETF is gearing up for another breakout, we could see a rise to $100.

semiconductor, smh

Netflix (NFLX)

I still can’t find the uptrend in Netflix, but we have firmly identified two key levels here. $320 is resistance and $306 is support.  I’m still sticking with the view of the stock rising to $330.

netflix

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Amazon (AMZN) 

It is encouraging to see Amazon hold support at $1620, again I still believe $1750 is in the cards.

amazon, amzn

Morgan Stanley (MS) 

The banks are starting to look awful again and Morgan Stanley is one. It is failing around $46.50, and that means that $44 is on the way.

ms, morgan stanley

Citigroup (C) 

Citigroup is another one. it looks like it on its way to $61. So much for those stock buybacks.

citigroup, c

Microsoft (MSFT) 

Sorry the last one, almost forgot. Microsoft. I saw a bunch of put buying yesterday that increased the open interest on the Dec 14 $100 puts, to roughly 14,000 open contracts. The puts imply a drop to about 98.70.  But the chart still looks decent and suggests the stock could work its way higher towards $113. Some conflict here, I know. 

msft

That’s it

-Mike

Photo Credit Via Flickr

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.

sp500, S&P 500, russell 2000, amazon, netfix, micron, banks, microsoft, oil, dollar

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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.