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Stocks Are Poised To Rise As Global Break Out Takes Hold January 18

Stocks Are Poised To Rise As Global Break Out Takes Hold

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Today is Friday, January 18

  • S&P 500 futures are pointing to a higher opening of 11 pointsย as of 8:30 AM
  • The US 10-year rate is at 2.77%
  • Dollar Index is at 96.02
  • WTI Crude Oil is $52.73
  • Gold:$1,285
  • VIX: 17.82
  • Critical events for today: Netflix Reports better than expected subscriber growth, Industrialย Production
  • Hong Kong Hang Seng Index +1.25%
  • Japan +1.29%
  • China Shanghai Comp.+1.42%
  • UK FTSE +1.49%
  • Dax +1.46%

Global Break Out

There are clear signs of a global stock market rally taking grip. There are similar patterns taking place in Hong Kong, Shanghai, Japan, Germany, France, the UK, Korea, and Singapore. These are all major global markets, and they would suggest to me that global equity prices on the cusp of a significant rebound over the coming weeks.

Hong Kong

The Hang Seng has firmly risen above technical resistanceย at 26,200 and is now quicklyย approaching another level of resistance at 27, 350

hong kong, hsi

Tencent (700 HK)

Tencent is seeing a huge break out crossing over resistance at 333 HKD and could be on its way towards 367 HKD.

tencent, 700

China

The Shanghai compositeย appears to be lifting towards resistance at 2650, from its current level of 2565.

shanghai

South Korea

The KOSPI appears to have put in a potentiallyย firm double bottom, and rise above 2,140 sends the index on to 2,220.

kospi

Japan

The Nikkei appears to have bottomed and is heading towards 21,000

nikkei

These are all major export economies and improving markets might suggest that the global slowdown or “soft patch” may be in the rearview mirror. If you look closely at the chart of Shanghai and Korea, they have both formed the same double bottom.

S&P 500

The S&P 500 as we noted yesterday rose above 2,630, and that level shall now act as support in the future. The chart would suggest that next level of resistanceย will come around 2,690.

sp500, spx

Netflix (NFLX)

Netflix is trading slightlyย lower today after the company reported results, which I still think theyย were strong. $335 will continue to act support. While a rise above $355 sends the stock on to $385.

netflix, nflx

Tesla (TSLA)

Tesla is trading sharply lower today after the company said it was reducingย its workforce by 7%.

Perhaps some people are trying to find something negative in this; I can’tย see it. The company said, “In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3.”ย  Consensus estimatesย are for adjusted EPS of $2.28 and GAAP EPS of $1.46, which is less than last quarters of results of $2.90 and GAAP of $1.75. I don’t see anything to showย it was worse than these estimates. Yes, it takes off the table a chance for a better quarter than last, but clearly, it was not widely expected to be the case.

The line “This quarter, as with Q3, shipment of higher priced Modelย 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.” doesn’t really tell me much of anything, other than what we already know, which is that there is not yet a smooth path forward.

Today’s sell-off seems ridiculousย to me, asย the update gives no clear sign of anything, other than the company is laser-focused on remaining profitable.

But hey, you need the negative headlines to get readership, so that is how it is presented.

The stock is still stuck in a range between $300 and $360. Nothing has changed.

tesla, tsla

Square (SQ)

Square continues to rise and could be on its way to $75. This is a premium article I wrote:ย Square’s Stock Is Breaking Out

square

Freeport McMoran (FCX)

Freeport McMoran continues to rise and now appears to be on its way towards $12.70.

freeport

Have an awesome Friday.

Mike

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Mott Capital Management, LLCย 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.ย Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of futureย results.ย