Michael Kramer and the Clients of Mott Capital Own Netflix
Thank you, MarketWatch for today’s mention: 4 charts that show why a stock-market rally has taken hold on Wall Street in February
S&P 500 (SPY)
Stocks were in rally mode today with the S&P 500 rising by over 1.25% and over 2,740. It was what –two trading days ago that market fell sharply? Everyone was freaking out. I wrote that evening I thought we were one and done. Well, guess what, not only did we recouped all of those losses but are now higher. Of course, I can write that with confidence now because we know the outcome. 😛
I did a video today to explain all of this in more detail. Stocks Are Breaking Out With More To Come
The good news; not only did the index break out and rise above 2,740 but, it is now also back into the trading channel that started at the market bottom in January.
Additionally, the RSI did finally break out, another positive sign that a long-term trend change has taken place. Based on that rising path of that channel the S&P 500 may reach 2,800 by Friday or Monday. We will see….
Now that we are getting closer to 2,800, we should refine that number a bit, because technical resistance rests around 2,795, so we will call the 2,795-2,800 resistance zone.
The only problem I see is the gap created this morning, and it is something we could refill later this week or next week, it could even be tomorrow. I just don’t know when it gets refilled, but I would be shocked if it didn’t get filled. 😕
Housing Index (HGX)
The housing index also broke out today rising 3%. Now the next big test comes at that massive downtrend which has been in place since April.
The Biotech group looks like it may be the next sector to break out as the XBI approaches resistance at $85.25.
RARE is one of the stocks that looks like it is nearing a pretty big break out of its own around $56. If that happens, the stock may rise to a price of around $60.50.
I think Roku has its eyes on the giant gap up around $56.
Amazon broke out, and it appears it is on its way towards $1,700 to the downtrend. I think the longer-term is still lower. I noted the falling wedge and the potential for the current rise yesterday and this morning.
Netflix is once again on the verge of a breakout, closing today at $360. Still, if the stock can finally get above this $360 level successfully, it has room to go to around $380 hopefully.
Should Facebook drop below $164, the next stop could be somewhere around $157, and that raises a real chance the entire gap gets refills.
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.