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The Monster Week Ahead: Watching – The VIX, Nvidia, Micron, Tesla & Biotech
We could see a much more relaxed market than the one we saw last week. With Tax Reform now through the Senate, the odds seem fairly good that reconciliation can produce a tax bill to be signed by the President by year-end. That should give stocks the confidence it needs to avoid any sharp declines. Stock like Nvidia, Micron, Tesla, and the biotech sector could be in focus.
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In terms of the political headline risk, that seem to always exist. But the original headlines that brought stocks lower on Friday seemed to have changed Friday night with a correction issued. The political websites can address the matter; I have to make mention of it because the S&P 500 did fall by nearly 1.7 percent from to peak to trough at one point. But stocks should feel calmer regarding this matter as well.
The Russell 2000 ETF ($IWM) was actually down by nearly 3 percent at the trough. Was the news a big deal? Yes.
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Why Tesla Could Double, And Nvidia Could Get Cut In Half
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Postive Signs
There was a positive that came out of Friday’s disaster, that we learned the market has a substantial underlying bid it, one that merely likes to buy the dips. There will be a day when buy the dip becomes, sell it more aggressively. It will come.
VIX
Additionally, the VIX index shows just how concerned the market was by the end of the day on Friday, which was no concern. Because by the close, the VIX was back to where to it started the day near 11.40, despite rising to nearly 14.25 intraday.
Chip Stocks
The chipmakers were decimated during the week, with the PHLX Semiconductor ETF ($SOXX) down by nearly 6 percent, and stocks like Micron ($MU) down 15.5 percent, Lam Research ($LRCX) down almost 13.5 percent, and Nvidia ($NVDA) down by nearly 8.9 percent.
SOXX Price data by YCharts
How this group trades to start this week should be of particular interest. The group began getting some upward momentum towards the end of the day Friday, and it will be essential to see the sector continue that positive energy higher.
The best way to know if a bottom had been reached in this group would be a lower open, retesting the lows from Friday, and than a surge higher into the end of the day Monday. It would serve as confirmation of the lows reached on Friday, and that a bottom was put in place.
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Micron
For Micron it would mean retesting the lows around $40.50 and a rally taking shares above $42.
Nvidia
For Nvidia, it means retesting a price below $194, and close above and close above $201.
Closing above $202 is very critical for Nvidia because shares of Nvidia have found themselves back in the rising wedge pattern it had been for most of 2017. As the 5-minute chart shows above, the stock was unable to break out and rise above $202, and the upper resistance trend line of the wedge. This week for Nvidia is beyond crucial.
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Flip-Flop
It is a flip-flop from last week, because last week, we noted how stocks like Visa ($V) and Nvidia, were likely to lead the market higher heading into year-end. But like most investors and traders, the action and event of trading starting on Wednesday through the close on Friday blindsided me as well as many others. Which tell us that charts are great in the absence of news flow, but new News also trumps charts, and when the market has to reset, it will reset. So I reset, like or leave it.
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Tesla
Tesla shares held up very well last week despite the volatility all over the marketplace. In fact, just look at the chart below and how the stock just stopped going down between $303 and $308. That level has been stable for Tesla since the quarterly results in mid-November.
If the stock can continue to hold this level and the broader market can regain its footing, I think Tesla could be set for a year-end rally. But I what do I know, I am likely the most bullish person on Tesla for 2018 on Wall Street, even MarketWatch noted my bullish stance, in their call of the day.
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Biotech
If you want to know where Biotech is heading this week, watch Biogen and Celgene. Biogen shares broke-out last week and retested that breakout at the end of the week. The stock could be looking to fill the gap, next week.
While Celgene also retested its breakout.
A good week for Biotech could mean a good week for stocks and the market.
Good Luck!
Free Articles Written By Mike:
Stock Prices Plunge On Emotion, Not Reality
Nvidia, Micron, and Lam May Not Have Bottomed Yet
Why Gilead’s Highly Touted Stock Has No Upside
Why Under Armour Could Fall 65%
How Tax Cuts Could Boost Home Depot’s Stock
Nvidia Could Fall 60% After Bubble Bursts
Why Intel and Broadcom Are Still Cheap
Apple Will Rise 17% by June, Options Trades Indicate
Why Roku’s Rocketing Stock May Flame Out
Verizon’s Stock May Rise More Than 15% in 2018
Biotechs Celgene, Biogen May Rally Through Yearend
AMD May Have Bottomed, Stock Set to Rise
Macy’s, JC Penney Face More Declines, Options Trades Suggest
Why Tesla’s Plunging Stock Price Conceals A Bright Future
Why Disney and Comcast Should Fear Netflix
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Michael Kramer and the Clients of Mott Capital own shares of Tesla, Celgene
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 #vix #chipmakers #micron #nvidia #tesla #celgene #biogen #biotech #news #youtube #stocks #week #ahead
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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