S&P Overview
Overall, the market has been moving in an expected behavior recently. Tech makes up so much of the indexes now that anytime they are impacted, the overall market slows down. We have seen key support levels hold in the S&P recently at 3287 with the diagonal trend line holding at the close around 3329. These are key levels for the uptrend to continue. If they do not, expect some type of pullback. With the market already pulling back around 8%, I do not too much more downside. Technically, the MACD has been trending in the right direction. This furthers my belief that we are headed back upwards. Speculating, I could see where the S&P starts to form a cup basing structure.
Key Stocks on my watchlist this week:
Apple (AAPL):
Apple is still the key of the market. Being the largest company by market cap, how it moves, the market moves with it. Being said, Apple has taken a hit over the past few weeks and has fallen >20%. Apple has been carrying a long trend line since the March lows and approached this level on Friday. I do not see this trend line as very strong and think it is more plausible that Apple tests the gap after it's last earnings. Stocks that gap up tend to fill the gap at some point. If it does test the gap, an entry point of 100 (resistance turned support) or $96.50 (start of gap) would be good places to enter.
In the news, Apple announced new watches and iPads, which were not that exciting. Apple continues to push the consumers towards more products and the watch is becoming the next iPhone for Apple. The Apple Watch adds more and more healthcare features, evolving Apple as a healthcare necessity. Apple Fitness+ has been hailed as a Peleton (PTON) challenger, but I do not foresee PTON being impacted by this. Apple One was announced as a subscription bundle for Apple. I can see this being successful for Apple, especially since many of the features can be trialed when you buy Apple products.
Amazon (AMZN):
Another FAANG stock that has gotten beaten up of late. This company is still as sure a bet of a company out there, so these pullbacks are great opportunities to add to current positions. Intra-day, this stock has fallen 18% with the RSI around 35. Looking in history, Amazon's RSI does not usually get to these levels and previous instances have been great buying opportunities. Looking at the chart, it seems like Amazon bounced off a potential support line around 2900. This week, we should see if that support holds or if the stock will continue downward to 2790.
Lemonade (LMND):
Recent IPO, Lemonade, finally showed some positive action in the chart during the market weakness on Thursday and Friday. It broke the 21 day MA (moving average) in strong fashion for the first time. It hit some resistance at 56.38 so I am hoping to see a backtest of the MA before resuming upward. This stock has a lot of potential for it over the next 3-5 years, so we will see how it goes.
Fun reads from the week:
TickTok has been in hot water over the last few weeks and a deal was reached with Oracle and Walmart to have the social media company continue to operate in the U.S. Trump really pushed Bytedance's hand this week as he gave WeChat and TickTok until Sunday to get a deal done.
https://www.cnn.com/2020/09/19/tech/donald-trump-tiktok-deal-approval/index.html
Tech IPOs drove a lot of market attention this week and look to continue this week. The largest of them all was Snowflake. Originally, they looked to open at $80. However, SalesForce Ventures and Warren Buffet's Berkshire Hathaway made deals to push the valuation up to $120. Before any retail investors could get their hands on it, the stock was up to $240. Like most IPOs, I expect this stock to fall for some time before creating a buying opportunity. I am interested in getting a position around $150.
https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-800-million-snowflake-stock-price-ipo-2020-9-1029599049
