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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Stock mentions: ROKU, AMZN, NFLX, TSLA, NVDA
Macro Mentions: SPY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA AND NFLX
Stocks had a solid finish to the week, rising by 77 basis point, with the S&P 500 finishing at 3,120. Based on the chart, the next significant level of resistance will come at 3,150. It is hard to determine if that is where we see a minor pullback or another period of sideways trading. The RSI for the S&P 500 is now overbought with a level of 75.
Ideally, we need the S&P 500 to advance at a measured pace, one that avoids a sharp pullback, preventing a scenario similar to what we saw in January 2018.
Based on the monthly chart, it seems relatively safe to say that the index has officially broken free of its 22 month period of consolidation, as I expected it would break out in month 23. I talked about this very topic in an article dated October 18 for Investing.com A Massive Stock Market Break Out May Be Near If History Proves Correct.
I also did a premium video on this topic on October 29 explain why I think the S&P 500 could be heading to around 3,600. S&P 500: Higher Prices To Come
But then again, the options guys were betting on this current move higher on October 7 – All laid out in this premium video. Options Bets Suggest S&P 500 Rise To 3,100 By Year-End
I know a lot of you love my free content, but I think my paid content is even better. I do believe you are missing out because there is a great community of more than 100 individual, professional, and active traders of all levels of experience to chat with. Plus, you get all of my great videos, audio updates (now 2x a day), articles, market spreadsheets, and get to ask me questions. The first two weeks are free, so what is there really to lose by trying? Enough with the shameless self-promotion 🙂
Ok, moving on.
Roku continues to trend higher, and it proved me wrong this time. I was on a winning streak with Roku, and it seems the bulls just overpowered me. The stock is probably heading back to $161. I got it wrong.
Nvidia fell following results. I didn’t spend much time analyzing the results. But the one thing that did dawn on me, which seems pretty clear, is that this is not the Nvidia of old that would crush results and raise by a mile. This is a much more ordinary company, and one needs to wonder if it was worth the premium it gets to other semiconductor companies. It still appears to be in a rising wedge, and I still think the stock heads to $188.
It would seem that sellers are starting to take control of Amazon, and based on that RSI, I don’t see how this stock doesn’t retest $1700.
Netflix continues to act well, with shares bouncing back on Friday. Again, I was seeing bullish options betting in this stock late last week, and I continue to think it heads towards $315.
Tesla has its big event this week, where it will unveil its new Cyber Truck. The only thing standing in the way of the stock and all-time highs is resistance at $360. I think the stock gets back to those all-times and pushes even higher.
More tomorrow at some point.
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.