Stocks Plunge on January 27 And Are Left Teetering On The Edge

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 27, 2019

Stocks – QCOM, TSLA, WDC, ROKU, SHOP

Macro – SPY

MICHAEL KRAMER AND THE CLIENTS OFF MOTT CAPITAL OWN TSLA

Stocks fell for the second day in a row. That last 45 minutes of trading presented a few unexpected problems I would rather not deal with, but what can one do. The index closed right on the uptrend, which one can even argue closed slightly below. In my world, it is called close enough. But more concerning to me was how we failed multiple times at the 3,255 region.

The one positive is that the index managed not to make a new low at the close, and finished right on support at 3,245.

S&P 500, spx

I’m not too concerned about the sell-off, we have been piecing together the clues for over a week now, and it became evident it was due to happen (Remember: Stocks Fade Again, Is A Storm Brewing on The Horizon?). Again, my base case was for a decline to around 3,250, with the potential of falling to about 3,200. I’d prefer it to hold around this 3,250 region, but there is not much control I have over this. Premium content – The Sell-Off Was Needed, Outlook Intact – Interestingly, I didn’t realize this, but if you sign up for an annual subscription, SA gives you 30 days to cancel with a full refund. That sounds like its better than a two-week free trial. Interesting. I just realized that today.

I think if we can clear this 3255 region, it sets up a nice gap fill. Premium content –Afternoon Gap Fill Coming?

The biggest problem is that China and HK will be closed again tonight. But there will be more markets open tonight at least, and hopefully, we can start getting a sense of how the locals feel about the situation. That is the one crucial piece of guidance I so desperately needed today.

Qualcomm (QCOM)

Qualcomm has not worked out the way I thought it would. Very dissappointing. For now, the uptrend is still intact, but it doesn’t have much more room to fall before the trend comes into harm’s way.

qualcomm, qcom

Tesla (TSLA)

Tesla got back to almost even today but gave back some by the day’s end. The biggest problem for the bear case right now is that it seems likely that anyone short this stock is using any pullback to cover, which means a bid may always be present. At least that was how I was taught to trade shorts gone horribly wrong.

tesla, tsla

Western Dig (WDC)

It wasn’t a great day for Westen Dig, but the stock held support where it was supposed too and on days like today, that is all you can ask for.

western dig, wdc

Roku (ROKU) 

What was support for Roku, now becomes resistance at $128. I think the stock continues to head lower, but now to $116.

roku

Shopify (SHOP)

Shop fell today, but more important is that the uptrend finally broke, and it sets up that move lower to $420 I’ve been looking for.

shopify, shop

 

Back 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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