New Highs Are Beating New Lows in Major Earnings Week
The New York Stock Exchange NYHL, a measure of new 52-week hIghs compared to new 52-week lows, is pointing to a persistent tailwind for equities. This indicator is bullish as a major earnings week unfolds.
Given Alphabet’s weighting in the major indices, most should move higher this week. INTC, AMZN and other big tech stocks in the FAANNG universe report second-quarter earnings. Facebook reports after the closing bell tonight.
New Highs – Financials
Banks are performing lately, despite some resistance levels overhead. The cycle is bullish as well, with room to run before reaching extremes.
Let your winners run in the financial and industrial sectors. Cut your losses in lagging sectors and reduce position size.
XLE – Cycle is Weak
This is one group that we are reducing size and open positions. We’ll sweep that money to cash or funnel some into winning positions.
The energy is sector shows support between 73.00 and 74.00, so look for a bounce as a range could hammer out between these levels (73.00 and 78.00).
XLP and XLU also look weak. Trim positions in this group.
Finally, keep an eye on the watch list for the week, especially in the financial group. BAC and SQ are working. Healthcare, retail, and technology round out the stocks on the list. All should do well this week.
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