Stocks Rise Sharply But Fail When It Matters Most
Stocks rose sharply on September 28 but failed to advance beyond the 50-day moving average.

Stocks Rise Sharply But Fail When It Matters Most

September 28, 2020

STOCKS – FB, TSLA, BA, INTC

Macro – SPY, 

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Stocks managed to gain today with the S&P 500 rising by 1.6% to close at 3,352. The Algo’s did everything in their power to close the S&P 500 just below its 50-day moving average, which acted as firm resistance all day. I’m usually not a fan of using moving averages as support and resistance. But today, the 50-day did hold firm. 

Today’s move higher is either the start of the next big wave higher or marks the peak of the next leg lower. I say that because we also managed to close on what appears to be the lasts potential downtrend line. After 3,366, there is no place on the chart in which you can connect three points to form a downtrend. 

It is too soon to say we have broken out because you need to see another convincing rally tomorrow, which could set up a potential move higher back to around 3,590, just like a failure at the downtrend is likely to send the index lower to about 3,180. 

For now, there is still a lower trend, and the index managed to fail at the 50-day moving average, and RSI stuck at 50.  

If I had to guess, I think there is a pretty good chance we fill the gap created this morning down at 3,300. 

Boeing (BA)

Boeing is very close to breaking out and heading higher. The stock has struggled but it appears it may be getting some bullish momentum, with a push above $167 potentially sending the stock to $183.

Facebook (FB)

Facebook didn’t have very much success moving higher today, getting stuck below resistance at $260. I still tend to think Facebook is heading lower from here.

Tesla (TSLA)

Tesla appears to be forming a symmetrical triangle. If that is the case, then there is a good chance it drops to around $372 before it breaks out in a few weeks and heads even higher. 

Intel (INTC)

Intel has done a fantastic job holding the lows and is now starting to trend higher on the RSI. It could even be setting up to fill that gap up to $59.75.

 

Have a great night, everyone! 

Mike

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