July 19, 2020
STOCKS – ADBE, AMZN, AMD, INTC, MSFT, NVDA TSLA,
MACRO – SPY, QQQ
Mike Reading The Markets Premium Content – $35/Month or $300/Year
- Mott Capital 2Q’20 Investor Letter
- Earnings Trends
- AMD May Be Ready For A 10% Drop
- Amazon Traders Betting Shares Plunge Following Results
- Bearish Bets In Nvidia Continue
- SPY VS QQQ – NEED TO KNOW
- Nasdaq 100 Facing More Losses – Morning
- Bearish Betting Persist For NVIDIA
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA AND MSFT
It will be another big week for earnings with results coming from companies such as Tesla, Microsoft, and Intel. There won't be much in the way of economic news, so that earnings will be driving these markets.
S&P 500 (SPY)
The S&P 500 has been stuck in neutral since the last FOMC meeting. The index has been unable to break out above resistance around 3,230, failing twice this week at that very level. We can see there is a clear uptrend in the index, and it seems likely that this week we retest that uptrend and move lower back towards 3,120.
NASDAQ 100 - (QQQ)
The QQQ is also likely to continue to move lower this week. The RSI is now officially trending lower, and that suggests a loss of bullish momentum. I still think the ETF falls to around $250 short-term.
Tesla will report results on Wednesday, and perhaps it makes another attempt at $1850. Estimates are for a loss of $0.11 per share on revenue of $5.233 billion. Elon Musk would like nothing more than for S&P 500 inclusion, to stick it to the shorts. If the stock does have a loss this quarter and doesn't get into the S&P 500, it could have quite the distance to fall, potentially back to $1,035. - Premium content on Reading The Markets - Testing Resistance/Reducing Tesla -Midday
Microsoft will report on Wednesday too, and I love this company, but it has gotten so expensive, trading at 32.6 times next year's earnings estimates. It hasn't been that expensive since 2002, and well above the average of 18.1. A drop to $196 seems reasonable. A decline below the uptrend at $196 could result in shares falling back to $188. The uptrend in the RSI is broken; it means lower prices are ahead.
Intel will report results this week too, and the stock has struggled mightily despite the big run-up in prices. $59.75 has been a severe level of resistance, with the potential for shares to fall back to $56.
AMD is likely to be impacted by Intel, and I have been seeing bearish betting in this one in the last few days. The stock likely drops to around $49.10. Premium content on Reading The Markets - AMD May Be Ready For A 10% Drop
Nvidia has been trending lower in the last couple of days, and I have been seeing a lot of repeat put betting taking place. I still think this one heads lower towards $385. Premium content on RTM - Bearish Bets In Nvidia Continue, Bearish Betting Persist For NVIDIA, Nvidia Is Priced For Perfection, May Have Topped Out?
Amazon won't report results until next week, but the stock is starting to pullback. I think the stock pulls back to uptrend this week to around 2,825. You can see the RSI broke its uptrend.
Remember to watch these software names closely, they have been struggling, and if they go, I think the sell-off for the technology sector can grow worse. Adobe is a good one to keep an eye on. The uptrend is broken on the chart and the RSI. A drop below $410 setups up a decline to $385.
Have a great Sunday!
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