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Technology Can’t Hold Rally, As Stock Prices Continue To Fade
Watching the market the past few days has been utterly exhausting, the twist and turns, the drama. Today’s rise in technology was no victory, especially given that all the signs of strength melted into the close of trading, when stocks prices and the S&P 500 faded into the close.
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It was just on November 21, when I wrote in the commentary that the S&P 500 could rally to nearly 2,700 by year-end. I figured it would happen by year-end and not in two weeks. From November 21 until December 4, the S&P 500 rose from 2,592 to 2,665, a gain of nearly 2.9 percent, a significant move in a matter of a few days.
It is pretty easy to see how the rotation has played over the past couple of weeks, nothing new here, from what we haven’t discussed before. The only difference, between today and previous days, is that the financials and discretionary stocks didn’t help to offset the losing sectors, helping to keep the S&P 500 in positive territory.
It could mean we are nearing the start of a rotation back the other direction, or we can be setting up for a further decline in the S&P 500 back towards 2,600. Again, either way, none of this at this point from a broader market sense should be concerning.
But it is worth noting not all stocks will recover the massive losses seen, should the market begin to rise, or the rotation goes back into tech, which it will eventually. Some stocks were indeed stretched from a fundamental point of view.
We will continue to focus on these for a bit longer because this is where the action has been and it gives us some important clues.
Nvidia shares failed to rise through resistance today around $191.50, watch that level. If the stock fails again there, the stock is not going higher, but lower.
Micron has an unusual setup, with what looks like a double bottom a bit below $40, but then the stock failed to break through resistance at $42, a rise above $42 is needed to avoid a further move lower.
Broadcom is coming back to support around $259; it is a big test.
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Other Key Stocks To Watch
Amazon shares at had a busy day, testing support at $1122, then pushed back above $1139, and closing above it. A potentially positive sign for Amazon.
Tesla shares can’t break out, and while there is firm support around $303, there also seems to be a wall of seller around $307. A rise above $307 would be a huge positive, while a fall below $303 would be bad.
Here is a perfect example of much the Banks had risen in the past days, on November 28 JP Morgan was trading at $98 and reached a high of over $108 by December 4, that is a rise of 10 percent in just 5 trading days! JP Morgan was only up about 13 percent before this move. The banks have seen huge moves.
That’s going to be it for today.
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Michael Kramer and the Clients of Mott Capital own shares of $TSLA
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.
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Tags: #sp500 #chipmakers #micron #nvidia #news #stocks #tesla #amazon #disney $JPM