Turnaround Tuesday Came A Little Bit Early On July 28

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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July 28, 2020

Stocks  – BA, SPLK, MCD, NXPI, SHOP

Macro – SPY, QQQ

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NASDAQ 100 (QQQ)

Bizarre overnight trading action with the futures surging, only to give back all the gains up and only to turn negative. The Nasdaq 100 futures traded up to 10,760 and is now trading down to 10,650.  Last night I drew in a trend line in the NQ futures, and at least for now, that seems to be a new level of resistance. 

Copper

Meanwhile, copper prices rose back to the uptrend, and that acted as resistance, with the metal falling to advance and retake the uptrend.  A decline below $2.86 creates a series of lower highs and lower lows and likely confirms a reversal of the trend. 

S&P 500 (SPY)

The S&P 500 ETF is trading down by about 20 bps, after failing at resistance at $323.60. A drop below $319 sets up a steeper decline to $311. 

Shopify (SHOP)

Shopify is trading higher this morning after Goldman Sachs upgraded the company ahead of results tomorrow morning to a buy from neutral with a $1,127 price target. I tend to think the stock is heading the other way first, to around $740. 

NXP Semi (NXPI)

NXPI is trading lower after posting disappointing revenue and inline guidance. The stock is hanging around support at $115. It is a significant level that needs to hold with the potential for the stock to fall to $106 otherwise. 

Splunk (SPLK)

Splunk is now trending lower too, and I, as I noted a couple of weeks ago, the uptrend that had been strong since the March lows broke, never recovered. I tend to think this group of stocks is essential since the software space had been one of the hottest sectors in the market. The stock was had its price target raised today to $228 from $188 at UBS>

Boeing (BA)

Boeing is drawing closer to a break of the descending triangle and heading lower to $144 and potentially $126. 

McDonald’s (MCD)

Finally, McDonald’s is falling and breaking an uptrend this morning after reporting weaker than expected earnings of $0.66 versus estimates for $0.76 per share. A drop below $178 could be trouble, so lets hope it doesn’t get there. 

Have a good day. 

-Mike

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.   

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