The Generals
When the market leaders begin to falter, a top in the market follows soon thereafter, at least that is the way thinking goes. If that is the case then the opposite should be true. When “The Generals” appear ready to break out, look for the indices to follow.
Apple is on the watch list this week, as price action nears previous pivot highs. RSI is turning higher. Volume shows institutions are active and price is above the 9/20ema. If we break above the 118.08 pivot high in October, there is no overhead supply. The “Kirby” opens up, similar to what we saw in NVDA recently. Remember, a cup and handle pattern can also be viewed as a double top, pending unforeseen catalysts.
Apple Inc. is estimated to report earnings on 01/24/2017. It is noteworthy that Apple barely beat consensus estimates by 0.60%. Will they beat by a wider margin, due to holiday sales? This could be the catalysts to propel Apple higher or sink this recent foray to higher ground. Plan accordingly.
AMZN had its day of reckoning, with a miss of (-38.82%) last quarter. As the stock neared 850.00, investors and institutions began taking profits well ahead of its earnings announcement. RSI was embedded for nearly two weeks, then price dropped below the 9/20ema. MACD crossed and started trending lower.
Now we see signs of recovery, with price action surging eleven (11) points yesterday for receding back below the 50ma. If buyers push the stock above the 50ma, the Kirby will open up. The right side of a cup would begin to appear as RSI continues to rise as well. Note the tight Bollinger Bands; anticipate a break soon.
Amazon.com, Inc. is estimated to report earnings on 01/26/2017, so plan accordingly. Holiday sales should reflect a return to earnings beats.
If the big cap tech stocks continue higher, look for the Nasdaq 100 (NDX) and the composite (COMPQ) to break out as well. NDX is already at ATH. The weekly charts look bullish.
SPY Daily – Intraday Support and Resistance
SPY blocks will recede below price action today, if the premarket rally continues this morning. 227.70 starts renewed resistance, though my gut tells me price could quickly maneuver above all time highs once again.
With price gapping above the 226.50 ~ 226.80 zone, look for price to hug its 9/20ema on its way to all time highs. SOTEMA should be bullish. Anticipate bull flags and support at these rising moving averages. Pullbacks to the rising 9/20ema can be bought, once a bullish candle signals a continuation of trend. If price falls below and closes, activate your stops. Its that simple.
Happy Wednesday – CV
PS: We’ll arrive at Disney World tomorrow. I’ll be monitoring via iPhone.
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