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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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN NETFLIX, TESLA, APPLE
Another exciting day of trading, with the bulls fighting the bears back. The bulls were on the brink of destruction when the S&P 500 hit a low of 2,584, and the Russell reach support at 1,433. But something interesting happened today because instead of the technology group leading the market lower, the leadership on the way down were the banks and energy. At their lowest point, both sectors were down over 3%, while the S&P 500 was off about 1.8%. But the Semiconductor and Technology sectors were down less than 1%.
Even more surprising was the Facebook was never down at any point today. Most of the FANG stock performed reasonably well at the height of the sell-off, following news the BREXIT vote would be delayed.
Some Shameless Self Promotion
I wrote in my StockTwit’s member room today, around 11:30: $SMH now up on the day. There seems to be a very real divergence taking place in the market. It is as if the rest of the market is now coming down to the technology sell-off and Tech is finding a bottom. We can see how the rest of the day plays out.
That is pretty much happened the from that point forward for the rest of the day.
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S&P 500 (SP500, SPY)
The good news is that the S&P 500 broke it’s December short-term downtrend and rose above resistance at 2,633. That puts the index on a path to rise towards 2,670.
Apple finally fell to support at $164, and that is where it stopped falling. That price has been a critical level of support, and we have spoken of it on many occasions. The stock fell on reports that a Chinese court has banned the company from selling its iPhones in China, in a patent dispute filed by Qualcomm. From what I have read, it is only for phones with iOS 11 or older, too bad for Qualcomm that Apple is on iOS 12. Oops… The stock will need to clear $170 to see a further advance to $180.
Facebook may be on the cusp of a significant breakout. The stock was very strong from the beginning of the day, despite the sell-off as previously noted. For the first time in probably six months, I have drawn an uptrend on the stock and the RSI is nearing a breakout. The stock appears to be attempting to break a long-term downtrend. It may be a baby step, but it may be on its way to $148.
Netflix continues to hold its long-term uptrend, but the significant level and struggle for Netflix has been $285, and rise above $285, would be a big break out.
Amazon continues to hold support at $1,620.
Tesla continues to act very well in a terrible market. I can’t help but wonder where this stock will be once the market improves. I wrote a premium article noting some options see it rise over $400. Will Tesla’s Stock See A Year-End Rally?
The banks are a different story, and I do believe they shall continue to fall. JP Morgan looks ready to drop to around $94.
Bank of America (BAC)
Bank of America looks like it may fall to $22.90
I wrote up a pretty in-depth article for ReachX, How bank stocks may face further declines in 2019 (JPM, BAC, WFC, C). Some of these banks may still be grossly overvalued, based on their price to tangible book values.
Anyway, that is gonna be it!
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
SP500, stocks, stock market, facebook, amazon, technology, banks, jpmorgan, bank of america, netflix, tesla