Tech Talk for Friday June 26th 2020

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Pre-opening Comments for Friday June 26th

U.S. equity index futures were higher this morning. S&P 500 futures were up 4 points in pre-opening trade.

Index futures moved slightly higher following release of economic news at 8:30 AM EDT. Consensus for May Personal Income was a drop of 6.0% versus a gain of 10.5% in April. Actual was a drop of 4.2%. Consensus for May Personal Spending was an increase of 9.3% versus a drop of 12.6% in April. Actual was an increase of 8.2%

Amazon gained $18.21 to $2,772.79 after Deutsche Bank and SunTrust RH raised their target price on the stock.

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eBay added $1.30 to $50.70 after Deutsche Bank upgraded the stock from Hold to Buy. Target price was raised from $42 to $57.

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Big Lots gained $3.75 to $37.60 after the company noted that quarter to quarter sales were ahead of expectations.

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McCormick improved $0.46 to $179.00 after Stifel Nicolaus raised its target price from $155 to $170.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/06/25/stock-market-outlook-for-june-26-2020/

Note seasonality chart on U.S. Durable Goods Orders

Technical Notes

Accenture (ACN), an S&P 100 stock moved above $211.32 and $215.42 to an all-time high extending an intermediate uptrend.

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Duke Energy (DUK), an S&P 100 stock moved below $79.12 setting an intermediate downtrend.

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U.S. Natural Gas Prices touched a 20 + year low on high and rising inventories for this time of year.

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Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2015 through 2019. The dashed vertical lines indicate current and year-ago weekly periods.

Nike (NKE), a Dow Jones Industrial Average stock dropped $3.79 to $97.61 following the close after reporting lower than consensus fiscal fourth quarter revenues and earnings.

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Major U.S. banks stocks and related ETFs initially moved lower following the close after stress tests by the Federal Reserve found that some banks could by stressed by the pandemic. The Federal Reserve announced a cap on dividends and a suspension of share buy backs for the third quarter of 2020.

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Facebook (FB), a NASDAQ 100 stock dropped 2.5% after the close after Verizon announced that the company is pulling out its advertising on Facebook and Instagram.

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A technical analyst on CNBC’s Fast Money last night reminded us of a famous technical analyst phrase, “The Bigger the Base, the Bigger the Move on a Breakout”. His example was the recent breakout by the Biotech sector and its related ETFs above a five year trading range.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for June 25th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Seasonal/Technical Commodities Trends for June 25th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for June 25th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

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The Barometer added 6.61 to 64.13 yesterday. It returned to intermediate overbought from intermediate neutral on a recovery above 60.00. Trend remains down.

 

TSX Momentum Barometer

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The Barometer added 4.30 to 72.77 yesterday. It remains intermediate overbought and trending down.

 

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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12 Responses to “Tech Talk for Friday June 26th 2020”

  1. Larry/ON Says:

    Don’t Rummage Through The Stock Market Discount Bin
    Those stocks are discounted for a reason. They are bad. They have problems. Smart people don’t want to own them. Oh but they are now value stocks. When a stock is in an downtrend your odds of getting caught on the wrong side of a trade is dramatically higher. Yesterday you could have piled into banks or energy as value plays coming off a downturn and where are you this morning? Take a look at the sectors that have performed well this year and how are they doing this morning. If you are in a bull market never trade or hold anything that underperforms the market. Only trade or hold what outperforms the market. I apologize if this appears obvious to some.

  2. Ron/BC Says:

    XLK the Technology ETF cleared the February high of $102 and is presently trying to hold at that breakout point. There is an obvious negative divergence on the RSI 8 and Stochastics and likely most any oscillator but price is king and despite a market selloff price is still holding up at support and on a Friday. A break below this support level would project a selloff to the $94 to $98 area support with the 50ema the most likely target at $97. Meanwhile price remains above $102 at support.

    https://stockcharts.com/h-sc/ui?s=XLK&p=D&yr=1&mn=0&dy=0&id=p62838521912&a=759590953

  3. Larry/ON Says:

    SHOP – Great day. FSLY even greater day but viciously overbought.. PYPL at breakeven in USD but up in CAD. Find what is working. PTON up. I am a big believer in SHOP. and also hold PYPL.

  4. Bman/Vancouver Says:

    Mary

    Made the decision oil and gas was uninvestable 3 years ago (even for a trade) with exception of pipelines and sold the lot. Not regretted the decision as most the companies previously owned were down before we hit Feb 2020. Pipelines kept as they are the highway to transport fuel and will be around for some time with good income potential. Explorers, producers and refiners are just too much risk. Seasonality for oil usually gets stronger from Feb-Mar till the fall, but given the total dislocation from COVID19 (and resulting reponses) it best to look elsewhere. While tech has a rich valuation, a nice pullback would be a place to put some money to work.

    See all my markers continue to point downwards. Ron what is your take on SPY (or S&P 500)? It looks like if we finish below 3020 and this becomes the new ceiling next stop is 2750-2800.

  5. Mary Says:

    Larry/ON

    RE #1 – words of wisdom, however I don’t see value in some of these tech stocks plus they are very expensive to trade.

    Bman/Vancouver

    Did well trading oil stocks earlier on but yesterday and today I guess its time to buy just when fear steps in. I did buy some just for a trade.

    UVXY was the winner today.

  6. Larry/ON Says:

    FB and GOOGL – stunning declines. Need to get the news on these but there is something going on with anti-trust regulation in the US. Not sure without more info

  7. Ron/BC Says:

    Bman/Van

    Here is the $SPX Daily chart. Price has sold off right to the 50ema and close to 2950 support. A break below 2950 would project a selloff to the 2700 area. So far no technical damage has been done on the pullback. The Seasonal Trend chart for July is very bullish as well.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=6&dy=0&id=p94657720336&a=725299577

    https://stockcharts.com/freecharts/seasonality.php?symbol=%24SPX

  8. Ron/BC Says:

    The DOW (INDU) is not in as good shape as the $SPX. The 50ema never did cross back above the 200ema which is a big negative. Price rallied back from the March low to the breakdown point at 27400 and sold off again to 25000 which is just short of 24700 price support. This close is below the 50 ema which will turn the 50ema down again if it stays below. The Island Reversal pattern at the highs suggested such a selloff but the 24700 level is still holding as support. A breakdown of that support would be very bearish. So far that hasn’t happened yet. Price needs to stabilize at 24700 or look out below!

    https://stockcharts.com/h-sc/ui?s=%24INDU&p=D&yr=2&mn=0&dy=0&id=p99942408582&a=673066566

  9. Ron/BC Says:

    $GOLD broke out above the top of its consolidation channel to new highs. Here is a line chart (closing prices only) of $GOLD. Other $GOLD related ETFs and stocks have also a similar pattern of breaking out.

    https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=2&mn=0&dy=0&id=p14709961042&a=673066139

    https://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=2&mn=0&dy=0&id=p40442770876&a=673066441

  10. DM/ON Says:

    Re #9
    Ron/BC,
    I’m following gold with XAU/USD and I believe this is what they call “spot price” trading around the clock like currencies and do not quite understand the difference from $GOLD. XAU/USD closed the week at $1,770.22 experiencing slight dip between 3:57pm and 5:00pm yesterday, while daily high was $1,772.02 at about 03:50pm, all EDT.
    XAU/USD and GLD are coinciding well on weekly chart closing not so well on the daily charts. Nevertheless,the technicals would probably follow the same trends and patterns.
    Weekly chart seems in clear up-trend and breaking above $1,765.38 seems important (daily high from May 18th).

  11. DM/ON Says:

    From the composite point of view on XAU/USD, technical + fundamentals, following post seems interesting
    https://www.fxstreet.com/news/gold-price-analysis-xau-usd-bears-lining-up-for-potential-phase-of-distribution-202006290110

  12. Ron/BC Says:

    The “WEEKLY” chart of $GOLD shows a very negative divergences on recent highs inspite of the Daily charts looking bullish. And there is resistance at $1798 but there is far more price resistance at $1923 as the long term Weekly chart shows. Haven’t heard anything about that major resistance point. Meanwhile price could clear $1798 and would still need to clear the $1923 major resistance of 2012 to be a ‘major’ breakout.

    https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=12&mn=0&dy=0&id=p42826606889&a=719852390

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