Market Pulse.
Stocks climbed to new highs this week after the FED suggested it would give a Rate-Cut in as soon as next month, to keep the Trade War from stopping economic growth. The rally comes after trade tensions and uncertainty over FED policies worried investors last month, with stocks posting their worst May since 2010. Dovish feelings in the FED and a probable meeting between Trump and Xi during next G20 summit, helped share prices this month, putting the SP500 SPX on pace for its best June since 1955, and now testing a crucial resistance at 2,950 level. A consequence of the central bank decision is that US Treasury’s yields remain near multi-year lows: the 30-year yield TYX is near 2.6%, while the benchmark 10-year yield TNX is below 2%, the lowest level since 2016.
As usual, crude oil prices climb when geopolitical tensions increased. Now fears come due of a U.S. military attack on Iran after it was reported that Iran shot down an unmanned U.S. surveillance drone over the Strait of Hormuz. Iran claimed that the drone was impeding on its territory. Oil futures /CL ended the week at $57.60 a barrel with a 6% up that day, the largest one-day rise since December. Metal prices shot up since Thursday, lifted by FED decision affect a weaker dollar: Gold futures /GC gets its biggest one-day advance since June 2016 and its highest settle since 2013, overcoming the $1400 level. Definitively, gold is (one of) the best instrument for trading this month, through its popular ETFs like GLD, GDX or those at triple velocity JNUG, DUST, and NUGT.
Ideas for this Week
Next, some brief ideas and technical notes of stocks from my June watchlist, for this week, June 24 to 28th.
1. Cree CREE $57.15
Its daily chart shows a stronger downtrend line (price touches it 4 times). This week again is approaching it, and a breakout could happen if market confirms its recent rally. Low Put/Call show a bullish sentiment of investors in this good company.
2. Dropbox DBX $25.01
Last Thursday its price breaks its downtrend line with heavy volume. Now it's overbought, and I will check if price retest this line, now support. As its implied volatility is low, seems a good moment to buy cheap options. The bullish sign could be the golden cross that is near to happen in its daily chart.
3. Fiserv FISV $91.48
Touches its resistance at $91.50, but clearly overbought. Recent outperform ratings by Wells Fargo and then Raymond James, with a price target of $110 and $103 force me to check carefully this stock this week.
4. Gilead Science GILD $69.38
Its price, ranging in a channel during all the year, last week breaks an important resistance, with confirmation include. Also overcomes its crucial SMA200 average. Good stock for options due to its low volatility. Only waiting for a pullback for entry long here.
5. PayPal PYPL $116.21
I'm paying attention to a bearish evening doji star candlestick in its daily chat, confirmed last Friday. In an amazing rally for 2 years, with a PE of 63, this stock needs a technical correction, probably a retest to $110 level.
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A next golden cross (when SMA50 crossover the SMA200 average) will reinforce the bullish bias in Dropbox DBX after its recent breakout. |
6. Atlassian TEAM $132.87
Same as Paypal, shows a bearish evening star in its daily chart, and its MACD decaying, signals some exhaustion in its long rally.
7. Twitter TWTR, $35.02
The level $35 is recurrent for this stock in the last two years. Its price does not finish taking off: always return to that level after up and down movements. A crossover below this level is forecast in the short-term due to its weak MACD, its recent removing accounts (that Wall Street dislikes), and also, Moffett Nathanson arguing that Twitter isn't spending enough to deal with the security issues that are plaguing tech giants, reiterating its sell rating.
8. Ulta Beauty ULTA $35.81
The cosmetic giant is again testing its all-time highs at $365, with a recent fine earnings report and some buy ratings along. Need to confirm its behavior at that level, probably rebounds on it or breakouts. In my radar.
9. VMWare VMW 173.39
I can´t understand why this stock falls after its decent Q1 earnings report in late May. It beats EPS and sales, maintaining its guidance for 2020, and confirm a$1.5B stock buyback. Partnerships with Amazon AMZN and Dell DELL reinforced my bullish view in this company. Three analysts raised its price target versus one (Morgan Stanley) who cuts it. Technically form a double-bottom pattern at $165.60 level, rebounding now from his. VMWare looks like a bargain today for the long-term.
10. US Steel X, $14.67
What a difficult stock to trade! Due to its volatility and usual uncertain moves in the struggling steel sector, I only use this stock for day-trades, checking if have a strong pre-market move, that usually continues some hours during the regular session, for a quick profit. It's daily chart show a bearish engulfing candlestick, but last Barron bullish report views finally some good news in the steel sector.
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As you see in this weekly chart, the $35 level is critical for Twitter TWTR in the last two years. Good opportunity for traders after the stock decides where to move. Seems a bearish bias is more probable. |
Good Trading!
@BravoTrader
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