Tech Talk for Tuesday February 16th 2021

Daily Reports Add comments

Morning Technical Notes for Tuesday February 16th

Financial SPDRs (XLF) moved above $31.62 to an all-time high extending an intermediate uptrend.

clip_image001[5]

Strength in Financial SPDRs was led by JP Morgan (JPM), a Dow Jones Industrial Average stock moving to an all-time high above $142.75

clip_image002[3]

Dow Jones Transportation Average and its related ETF (IYT) moved above 13,208.63 and $232.97 respectively to all-time highs extending an intermediate uptrend.

clip_image003[5]

clip_image004[1]

Energy SPDRs (XLE) moved above $45.00 extending an intermediate uptrend. Triggered by record low temperatures in the southern U.S.! Crude oil, gasoline, natural gas and heating oil prices were sharply higher in overnight trade.

clip_image005

Conoco Phillip (COP) responded to higher prices by moving above $$47.85 extending an intermediate uptrend.

clip_image006[1]

Canadian energy stocks have responded strongly to overnight strength in oil, gasoline and natural gas prices. Canadian Natural Resources, (CNQ) , a TSX 60 stock moved above $34.75 extending an intermediate uptrend.

clip_image007

Cenovus (CVE), a TSX 60 stock moved above $8.78 extending an intermediate uptrend.

clip_image008[1]

Canadian Bank stocks are on the move prior to release of their fiscal first quarter results at the end of this month. Commerce Bank (CM) a TSX 60 stock moved above $114.21 to an all-time high.

clip_image009

Scotia Bank (BNS), a TSX 60 stock moved above $71.17 and $71.26 to a 3 year high extending an intermediate uptrend.

clip_image010[1]

European equities and related ETFs are breaking to all-time highs. Eurozone iShares (EZU) moved above $45.84 extending an intermediate uptrend.

clip_image011

Europe iShares (EZU) that include a U.K. component moved above $49.91 extending an intermediate uptrend.

clip_image012[1]

U.K. iShares (EWU) moved above $31.27 to an all-time high extending an intermediate uptrend.

clip_image013

Base Metal stocks and related ETFs moved strongly higher this morning thanks to strength in base metal and lithium prices. Lithium ETN (LIT) moved above $72.95 to an all-time high extending an intermediate uptrend.

clip_image014[1]

Base metals ETF on the TSX (XBM) moved above $16.80 to an all-time high extending an intermediate uptrend.

clip_image015[1]

Base metals ETF in the U.S. (PICK) moved above $41.60 to an all-time high extending an intermediate uptrend.

clip_image016[1]

Ditto for BMO Equal Weight Base Metals ETF (ZMT) on a move above $55.97!

clip_image017[1]

In Canada, First Quantum (FM), a TSX 60 stock was a leader on a move above $26.72.

clip_image018[1]

The largest base metal stocks in the world led the advance in base metal ETFs. BHP Billiton moved above $74.41 to an all-time high extending an intermediate uptrend. Rio Tinto moved above $86.90 to an all-time high extending an intermediate uptrend.

clip_image019[1]

clip_image020[1]

Pre-opening Comments for Tuesday February 16th

U.S. equity index futures were higher this morning. S&P 500 futures were up 15 points in pre-opening trade.

Index futures were virtually unchanged following release of the February Empire State Manufacturing Survey at 8:30 AM EST. Consensus was an increase to 6.00 from 3.50 in January. Actual was 12.10.

Gasoline, natural gas and crude oil prices moved higher on news that record low temperatures along the Gulf coast have prompted disruptions in energy supply to refiners in the area.

CVS Health gained $1.15 to $75.36 after the company reported higher than consensus fourth quarter revenues and earnings.

clip_image001

Shopify added $15.62 to $1863.82 after Susquehanna raised its target price by 47%.

clip_image002[1]

Microsoft advanced $0.71 to $245.70 after Wedbush raised its target price from $285 to $300,

clip_image003

EquityClock’s Daily Comment

Following is a link:

http://www.equityclock.com/2021/02/13/stock-market-outlook-for-february-16-2021/

The Bottom Line

Equity markets around the world moved higher last week. Greatest influences on North American equity markets remain growing evidence of a second wave of the coronavirus (negative) and timing of distribution of a vaccine (positive).

Observations

TSX Composite Index has a history of outperforming the S&P 500 Index from the last week in December to the first week in March. The main reason: Canadian investors focus on contributing to their RRSPs during the first 60 days in the New Year and subsequently invest more funds into the equity market. As indicated in the chart below, average gain per period for the TSX Composite Index relative to the S&P 500 Index during the past 20 periods was 3.3%. History is repeating: Since December 31st, the S&P 500 Index has gained 4.76% and the TSX Composite Index has advanced 5.89%.

clip_image002

Intermediate term technical indicator for U.S. equity markets (e.g. Percent of S&P 500 stocks trading above their 50 day moving average) was virtually unchanged last week. It remained intermediate overbought. See Barometer chart at the end of this report.

Long term technical indicator for U.S. equity markets (e.g. Percent of S&P 500 stocks trading above their 200 day moving average). also was virtually unchanged last week. It remains at extremely overbought levels.. See chart at the end of this report.

Medium term technical indicator for Canadian equity markets was virtually unchanged last week. It changed from intermediate oversold to intermediate overbought. See Barometer chart at the end of this report.

Long term technical indicator for Canadian equity markets (i.e. Percent of TSX stocks trading above their 200 day moving average) also was virtually unchanged last week. It remains intermediate overbought. See Barometer chart at the end of this report.

Short term short term indicators for U.S. equity indices, commodities and sectors (20 day moving averages, short term momentum indicators) remained elevated last week.

Short term momentum indicators for Canadian indices and sectors also remained elevated last week.

Year-over-year 2020 consensus earnings by S&P 500 companies remained positive last week. According to www.FactSet.com, fourth quarter earnings on a year-over-year basis are expected to increase 2.9% (versus a gain of 1.7% last week) and revenues are expected to increase 2.8% (versus previous 2.7% increase last week). Earnings for all of 2020 are expected to fall 11.4% and revenues are expected to decline 1.1%.

Consensus estimates for earnings and revenues by S&P 500 companies turn more positive on a year-over-year basis in the first quarter of 2021. According to www.FactSet.com earnings in the first quarter of 2021 on a year-over-year basis are expected to increase 21.2% (versus previous 21.0% increase last week) and revenues are expected to increase 5.6%. Earnings in the second quarter are expected to increase 49.4 % and revenues are expected to increase 15.6%. Earnings in the third quarter are expected to increase 16.7% (versus previous 16.0% increase) and revenues are expected to increase 9.5% (versus previous 9.3% increase). Earnings in the fourth quarter are expected to increase 13.4% (versus previous 14.6% increase) and revenues are expected to increase 6.9% (versus previous 6.7% increase). Earnings for all of 2021 are expected to increase 23.6% (versus previous increase of 23.4%) and revenues are expected to increase 9.1% (versus previous 9.0% increase).

Economic News This Week

February Empire State Manufacturing Survey to be released at 8:30 AM EST on Tuesday is expected to increase to 5.50 from 3.50 in January.

January Producer Price Index to be released at 8:30 AM EST on Wednesday is expected to increase 0.4% versus a gain of 0.3% in December. Excluding food and energy, January Producer Price Index is expected to increase 0.2% versus a gain of 0.1% in December.

January Retail Sales to be released at 8:30 AM EST on Wednesday are expected to increase 1.2% versus a drop of 0.7% in December. Excluding auto sales, January Retail Sales are expected to increase 1.0% versus a drop of 1.4% in December.

January Capacity Utilization to be released at 9:15 AM EST on Wednesday is expected to increase to 74.8 from 74.5 in December. January Industrial Production is expected to increase 0.4% versus a gain of 1.6% in December.

January U.S. Housing Starts to be released at 8:30 AM EST on Thursday are expected to slip to 1,654,000 units from 1,669,000 units in December.

February Philly Fed Index to be released at 8:30 AM EST on Thursday is expected to slip to 20.0 from 26.5 in January.

Canadian December Retail Sales to be released at 8:30 AM EST on Friday are expected to increase 0.1% versus a gain of 1.3% in November.

January Existing Home Sales to be released at 10:00 AM EST on Friday are expected to slip to 6.56 million units from 6.76 million units in December.

Selected Earnings News This Week

Frequency of S&P 500 company quarterly reports is winding down this week: 74% of companies have reported to date. Another 51 companies (including one Dow Jones Industrial Average company) are scheduled to report this week. Frequency of TSX 60 company quarterly reports also has passed its peak.

clip_image004

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for February 12th 2021

clip_image006

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for February 12th 2021

clip_image008

Green: Increase from previous day

Red: Decrease from previous day


Sectors

Daily Seasonal/Technical Sector Trends for February 12th 2021

clip_image010

Green: Increase from previous day

Red: Decrease from previous day

Technical Scoop

Thank you to David Chapman and www.EnrichedInvesting.com for a link to Technical Scoop. Headline this week reads, “More mania, eerie similarity, option surge, commodity Supercycle, shortage driver, outshining silver”. Following is the link:

More-mania-eerie-similarity-option-surge-commodity-Supercycle-shortage-driver-outshining-silver.pdf (enrichedinvesting.com)

Technical Scores

Calculated as follows:

Intermediate Uptrend based on at least 20 trading days: Score 2

          (Higher highs and higher lows)

Intermediate Neutral trend: Score 0

          (Not up or down)

Intermediate Downtrend: Score -2

          (Lower highs and lower lows)

Outperformance relative to the S&P 500 Index: Score: 2

Neutral Performance relative to the S&P 500 Index: 0

Underperformance relative to the S&P 500 Index: Score –2

Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: –1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: –1

Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.

Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower

Changes Last Week

clip_image012

Changes in Seasonality Ratings

Nikkei Average changed to Positive from Neutral to March 28th

Natural Gas changed from Negative to Positive to mid-June.

Technical Notes for Friday February 12th

American Express (AXP), a Dow Jones Industrial Average stock moved above $129.54 extending an intermediate uptrend.

clip_image016

Micron (MU), a NASDAQ 100 stock moved above $87.25 to an all-time high extending an intermediate uptrend.

clip_image017

Lam Research (LRCX), a NASDAQ 100 stock moved above $585.42 to an all-time high extending an intermediate uptrend.

clip_image018

Schlumberger (SLB), an S&P 100 stock moved above $26.73 extending an intermediate uptrend.

clip_image019

Saputo (SAP), a TSX 60 stock moved above $37.69 extending an intermediate uptrend.

clip_image020

S&P 500 Momentum Barometer

clip_image021

The intermediate Barometer added 1.00 on Friday and gained 0.60 last week to 72.94. It remains overbought.

clip_image022

The long term Barometer slipped 0.40 on Friday and dropped 1.40 last week to 88.58. It remains extremely overbought as long as it remains above 80.00.

TSX Momentum Barometer

clip_image023

The intermediate Barometer added 3.40 to 66.99 on Friday and 3.53 last week to 66.99. It remains intermediate overbought.

clip_image024

The long term Barometer was unchanged on Friday and added 1.24 last week to 78.64. It remains 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




Comments are closed.

Entries RSS Comments RSS Log in