I would like to tell you Tuesday’s statistics were good ... but I can’t.
They were incredibly mediocre. Just witness that breadth was better on Friday with the S&P up 32 and net breadth positive 1,590, whereas Tuesday had the S&P up 42 and net breadth at positive 900.
But there was good news, at least to me it was good news. The down-and-out stocks rallied, and some of them even rallied well. Let me begin with the banks, which were red on the day and some folks got upset with them. OK, I’ll give you that relative to the rest of the market they were terrible, but let’s stop and inspect the chart of my favorite bank, JPMorgan (JPM) - Get Free Report.
It got to resistance. Heck, the stock was up almost 10% between last Thursday and this morning. This is no tech stock. It’s a hated bank. What if it digests the gain and then makes a push upward? As long as it can stay over $95, that’s my view.
There was an increase in the number of stocks making new lows, which again is not great news, but I am encouraged that the down and outers held their own. Let’s look at another one of the return-to-work stocks I have liked lately: United Air (UAL) - Get Free Report. Despite the horrible virus news the stock holds onto that $30 area, doesn’t it? If it can get up and over $35 that would improve the chart, wouldn’t it?
If we can spread the wealth and get the market to embrace more than just technology stocks the market can improve. If we go right back to a concentration of tech stocks I insist it will not be bullish.
Someone asked about First Solar (FSLR:Nasdaq), which I was going to wait and covet Wednesday, but since it broke out Tuesday, I figured I need to discuss it. There is some resistance all the way up, but as long as the stock stays over $60 it should so well.
I was asked about General Motors (GM) - Get Free Report back in May and I liked the chart and it had a good run, but then came all the way back. If it can get over $26 then it starts eating through that resistance left overhead. If it pulls back and stays over $24 then there would be a tiny head-and-shoulders bottom developing wouldn’t there?
Adobe (ADBE:Nasdaq) held a nice uptrend line, but if it cannot rally up and over $440 soon, it is going to look like a head-and-shoulders top has developed.
The McClellan Summation Index is still heading down. This is now six weeks that it has been in a decline.
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We looked at Fastly (FSLY) - Get Free Report not long ago and I believe I said it hadn’t done anything wrong yet, but I could not buy it up there. It still hasn’t done anything wrong, but at least now it has corrected and bounced off the line, so if you want to buy it you know where you’re wrong: under today’s low.
Mercado Libre (MELI:Nasdaq) is bouncing off an uptrend line, so here you know that under $950 and you are dead wrong to be long it.
I noted several weeks ago that the defensive stocks were getting better and ConAgra (CAG) - Get Free Report is one of those names. While I am never a fan of stocks on their highs (I prefer them when they are down and out), this is a breakout, so as long as it stays over $35 the next target should be $38-$40 with a possibility of a target in the $46-$48 area longer term.