Tech Talk for Friday January 10th 2020

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Pre-opening Comments for Friday January 10th

U.S. equity index futures were higher this morning. S&P 500 futures were up 6 points in pre-opening trade.

Index futures were virtually unchanged following release of the December Employment Report at 8:30 AM EST. Consensus for December Non-farm Payrolls was a drop to 165,000 from 266,000 in November. Actual was 145,000. Consensus for December Unemployment Rate was unchanged from November at 3.5%. Actual was unchanged at 3.5%. Consensus for December Average Hourly Earnings was an increase of 0.3% versus a gain of 0.2% in November. Actual was an increase of 0.1%.

The Canadian Dollar added 0.15 to U.S.76.67 cents following release of Canada’s December Employment Report at 8:30 AM EST. Consensus for December Employment was an increase of 24,000 versus a drop of 71,200 in November. Actual was 35,200. Consensus for the December Unemployment Rate was 5.8% versus 5.9% in November. Actual was a drop to 5.6%.

Urban Outfitters dropped $2.29 to $25.40 after announcing lower than consensus sales in November and December.

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Deere added $0.02 to $177.62 after Stifel Nicolaus raised its target price to $190 from $175.

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Lennar gained $0.51 to $58.20 after announcing a triple increase in its dividend to 12.5 cents per quarter.

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Foot Locker dropped $0.84 to $37.70 after Susquehanna downgraded the stock to Neutral from Positive. Target was reduced to $41 from $47.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/01/09/stock-market-outlook-for-january-10-2020/

Note seasonality chart on Initial Jobless Claims

 

StockTwits released yesterday @EquityClock

S&P/TSX 60 Index $XIU.CA moved above 1,024.47 to an all-time high extending an intermediate uptrend.

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Starbucks $SBUX, an S&P 100 stock moved above $89.30 on an analyst upgrade extending an intermediate uptrend.

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Kraft Heinz $KHC, an S&P 100 stock moved below $30.16 setting an intermediate downtrend.

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Synopsys $SNPS, a NASDAQ 100 stock moved above $146.66 to an all-time high extending an intermediate uptrend

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Texas Instruments $TXN, a NASDAQ 100 stock moved above $131.21 to an all-time high extending an intermediate uptrend.

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Solar ETF $TAN moved above $32.36 to a five year high extending an intermediate uptrend.

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Waste Connections $WCN.CA, a TSX 60 stock moved above $122.30 and $122.81 setting an intermediate uptrend.

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Pembina Pipeline $PPL.CA, a TSX 60 stock moved above $49.35 to an all-time high extending an intermediate uptrend.

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Intuit $INTU, a NASDAQ 100 stock moved above $275.16 re-establishing an intermediate uptrend.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for January 9th 2019

spx jan 10

Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for January 9th 2019

crb jan 10

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for January 9th 2019

xlk jan 10

Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

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The Barometer gained 3.21 to 75.55 yesterday. It remains intermediate overbought.

 

TSX Momentum Barometer

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The Barometer added 2.01 to 66.36 yesterday. It remains intermediate overbought.

 

Disclaimer: Seasonality and technical ratings offered in this report and at

www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed

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22 Responses to “Tech Talk for Friday January 10th 2020”

  1. Ron/BC Says:

    Bernie

    Re:KEY.to. Big swings in this stock and presently back in its familiar $5 range of $29 to $35 again. Not a lot of interest in the stock. Presently looking good with the rising 50ema above the rising 200ema but approaching the top of its channel resistance. The 2nd long term chart shows its history and the importance of clearing $35. (still working on the other two.)

    https://stockcharts.com/h-sc/ui?s=KEY.TO&p=D&yr=2&mn=0&dy=0&id=p71551459962&a=712381149

    https://stockcharts.com/h-sc/ui?s=KEY.TO&p=D&yr=12&mn=0&dy=0&id=p19950517223&a=712381579

  2. DougP Says:

    RonBC, Bernie, et al.

    Like Mike, I am “my own advisor”, but I am less sure when it comes to advising my wife. She is interested in The Power Elite program promoted by Jon Markman. Have any of you had experience with Markman? I confess to being skeptical of all promoters in this game, always asking myself why they bother if they can make so much money for themselves with their scheme.

  3. Roy Says:

    Anyone have thoughts on TECK.B?

  4. Larry/ON Says:

    Re 3. Roy – Very interesting both on a fundamental and technical basis. Earnings forecasts are optimistic for 2020 and Teck was upgraded to buy in Dec by Citigroup and outperform by Raymond James a week ago. It trades at half BV. The stock has a multi-year double bottom 2009 and 2015. It’s worth taking a partial position which I will do and just put it away. A lot of potential.

  5. Larry/ON Says:

    Teck.B – To add. There is less than 1% short-interest in the stock and there was some recent insider buying but I would describe it as minor.

  6. Bernie Says:

    Ron/BC,
    Re#1 Thanks Ron. KEY.TO is cheaper than PPL.TO but still a bit expensive.

    DougP,
    Can’t say I ever heard of Markman. I had a quick peek at his bio. Apparently he publishes two options trading services and two futures trading services. Definitely not for me. Maybe Ron/BC heard of him.

  7. Ron/BC Says:

    Bernie

    AD.to has been having higher highs and higher lows with the 50ema rising and above the rising 200ema. Since the breakout and gap in November there has been a loss of momentum and is very stretched out. Note the negative divergences on the RSIs above and below. The long term 2nd chart shows why as price is approaching major resistance at $23 and needs to pullback to suggest a good buying point. Not a lot of volume on this stock which contributes to sharp price changes.

    https://stockcharts.com/h-sc/ui?s=AD.TO&p=D&yr=2&mn=0&dy=0&id=p00449460703&a=712383660

    https://stockcharts.com/h-sc/ui?s=AD.TO&p=D&yr=8&mn=0&dy=0&id=p06978112823&a=712382659

  8. Ron/BC Says:

    Bernie

    Here is a chart of EIF.to. Price broke out above the 2016 high this year and has a nice rising trend since. The last run up from $38 to $46 has seen a loss of momentum and is stretched out and needs a rest despite a nice uptrendline and price pattern. Price is consolidating around 42.40 but is also stretched out and needs more consolidation sideways or lower. Not a lot of volume on this one either which makes it vulnerable. Short term price can bounce of present support and double top or breakout again but I wouldn’t take a position here. Overall I realize you aren’t as concerned with capital depreciation as I am so that does make your entry level less critical.

    https://stockcharts.com/h-sc/ui?s=EIF.TO&p=D&yr=4&mn=0&dy=0&id=p37959724662&a=712382650

    https://stockcharts.com/h-sc/ui?s=EIF.TO&p=D&yr=12&mn=0&dy=0&id=p91682060546&a=673066188

  9. Ron/BC Says:

    DougP

    I’ve never heard of Jon Markman. Always best to check out his record if possible. And after studying markets for many decades I’ve never found an advisor that could protect my money better than myself. Your own advisor according to your post is likely the best one. And as far as advising your wife on anything it’s never a good idea. You can’t possibly win even if you are right.

  10. Bernie Says:

    Ron/BC,

    As always I appreciate your descriptive charts and summations Ron! I’m now leaning towards KEY.TO and AD.TO but they have to fall off a bit first. As for EIF.TO, I’ve held a very large position in my N/R account since 2009 and had it in my RRSP/RRIF for almost as long before selling in 2018. I can’t seem to get my head around starting a new position in my TFSA at these lofty levels.

  11. Ron/BC Says:

    Bernie

    I think waiting for a better entry level in many markets is a good idea. Many charts are looking good technically with not much to complain about. But if you look at a longer term chart of them you’ll see price a very long ways from its 200ema and major uptrendline and match a previous time it did the same thing in the same time period only to sell off for many months until it came back to its long term moving average and 200ema. Stock rallies are much like a runner that after a strong run has to rest and leave the rallying behind for some time and consolidate. I’ve found when you really wished you had bought a stock it is at or near its high. I have no idea what to do with my TFSA. Don’t have a lot anyways as I put the entire amount into that 4% GIC at Coast Capital a couple of years ago. I’ve come across a several analysts that don’t see anything wrong with the markets here but with the spike in prices that are very obvious relative to its long term trend I’m not going to chase anything here.

  12. Ron/BC Says:

    Here is a chart of the U.S. 10 year interest rate yield. Very bullish chart being an Ascending Triangle pattern suggesting an sizeable increase in rates ahead once the resistance at 19.50 is cleared. I’ve overlaid the XLRE Real Estate Investment Trust ETF to show the overall inverse relationship they have.

    https://stockcharts.com/h-sc/ui?s=%24TNX&p=D&yr=3&mn=0&dy=0&id=p14482879852&a=678846132

  13. Ron/BC Says:

    Bernie
    Here is EIF.to again with the long term chart. The main point I was trying to make is see how the run up for all of 2016 was from 16.50 to 37.35. During that time there was nothing wrong with the chart and everyone was recommending the stock and happy owning it. Then from the end of 2016 price fell from 37.35 to 21.98 by mid 2017. Most analysts focus on short term charts as it makes their point well on their bullishness. So you don’t see much wrong when a run up like this is occurring other than the price pattern going vertical or parabolic or just out of character from its normal pattern. If you look at the recent run up from early 2019 through the year you can see price has run up from 23.93 to 46.10 in one year as well. Doesn’t mean it can’t go higher but see the similarity with a long term chart along with the negative divergences on the RSIs. The RSIs can just reflect short term fluctuations but the run up relative to the stock’s character looks vulnerable to a sizeable pullback in price and time. I know your entry level isn’t as critical as mine as you have a different reason for owning stocks but it would still be a concern to be underwater on the stock if it did selloff sharply relative to its earnings and dividends etc I would think. I see a lot of charts that look just like this. Look at a bunch of charts going back a decade or two and ask yourself if you’d still like to buy at these present prices. That stock in 2008 was around three bucks. Now it’s around $45. Just something to think about.

    https://stockcharts.com/h-sc/ui?s=EIF.TO&p=D&yr=12&mn=0&dy=0&id=p91682060546&a=673066188

  14. dave/ab Says:

    Hi Ron

    Post #11

    I agree with you. Some people call it market timing just because you wait for a comfortable entry point. I don’t care what people say about this. You can dollar cost average and also pick an appropriate entry point.

    I believe in waiting for a good chart pattern before entry, example a consolidation and then a breakout before entering a long term position. Consolidation adds a layer of protection and price support. Theses support levels becomes important if there is a correction.

  15. FishFat Says:

    The S&P500 ($SPX) had a key reversal day on Friday. Multiple indicators show negative divergence – including the RSI, MACD Histogram, and Slow STO. The price is well above the 34d-EMA. Not a great time to be throwing money at the market.
    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&st=2019-04-01&en=2020-01-10&id=p75439011286&listNum=85&a=712895385

  16. Larry/ON Says:

    SP500 Friday Bar Does Not Meet Technical Definition of Key Reversal – The close must be below the previous day’s low which did not occur. It came close. Maybe I am splitting hairs. It is a bearish bar. We need some confirmation on Monday.

  17. FishFat Says:

    Larry/ON, re: #16
    Yes, you are correct. In is not a Key Reversal day – my bad. Close but not cigar.

  18. Bernie Says:

    Ron/BC,

    You make very good points and sense Ron! I’m just not used to sitting and waiting in cash. I might take a partial position with PPL depending on its movement on Monday.

  19. leon Says:

    Its most regrettable that CANUCK2004 was pushed out of the conversations because he was one of the best opinions on this sight for longer evaluations.

  20. Ron/BC Says:

    Bernie

    Well you could use some of that cash as you are waiting for a good entry point to tune up your place before you sell it in the spring. Amazing the real return you can make investing in your home. Ask your wife what she’d like to see your place repaired or redone. Don’t give buyers a good reason to walk away. You can end up with multiple offers when a place looks especially inviting. I know I couldn’t make as much on the stock market as I can with real estate. And that’s just updating my place as time goes by until it’s all done and time to sell. Meanwhile enjoy your place. A saying I’ve always liked that is helpful for selling is:
    “In order to sell what the customer buys one has to see with the customer’s eyes.”

  21. Bernie Says:

    Ron/BC,

    The cash I’m holding is cash in my TFSA which has already been contributed. We use our banks savings for expenses outside of our regular budget, like home repair and upkeep. It was dipped into twice in 2019 when we had our decks repainted in the spring and had flooring installed throughout the basement in the fall. It was actually our realtor who suggested the flooring. We had held off on that due to previous flooding and concern that it may happen again. We haven’t had any issues since the sump pump was installed anyway so we went ahead with the flooring. The lower level looks more lived in now with the new laminate in place. We feel we’re ready for listing now unless we have another emergency.

    I have decent diversity in my TFSA now but feel a midstream pipe company would fit in well with my other holdings. Both PPL and KEY have sound management and balance sheets. Their dividends and dividend growth are decent and similar to each other. PPL is the larger and growthier of the two. I favour PPL slightly over KEY.

    I’d like to add Alaris (AD.TO) because I feel they’ve resolved the issues they had with a few of their royalty clients. Their stock price, however, hasn’t fully recovered so IMO they’re undervalued and a low risk play for a great dividend and modest dividend growth.

    Either way I’m not breaking the bank with purchases here. Taking partial positions isn’t a bad option in the grand scheme.

  22. dave/ab Says:

    Hi Bernie

    I actually own all 3 stocks you wrote about. Not sure if you really want to hear another opinion on them. I bought both KEY and AD on a bottom fishing pattern back in October and PPL have held for a few years.These are 3 companies I will hold possibly forever. From the Long term weekly and monthly charts I see better potential for AD and KEY. Both breaking from ascending long term triangle and from resistance. With PPL if it can break $50 it’s hard to tell how high the ceiling is, but $50 is long term resistance on it. I am often leary of companies coming out of a merger. I never know if a company has paid to much or got a good deal on the takeover. Since the closing of the merger with Kinder Morgan I’m looking at Pembina as trading sideways till the market full digest the takeover over the next few quarters. JMHO.

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