A Rising High but Rising Lows
When are rising highs and rising lows not necessarily a good thing? When the rising lows represent bad breadth. We also look at TSLA, AMZN, BRK.B, WDAY, NET and NUE.
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The Market
The question of the day, at least in my inbox, was ‘why have we rallied?’ By that they mean not why has the S&P rallied again but why did all the others rally? I have no idea, but then I am not very good at narratives. I would just say because they were oversold.
Now before you get excited, the market internals were not very good. A mere 60% of the volume was on the upside. Net breadth on the NYSE was +520 with the S&P up 41 points. Last week the S&P was +45 with net breadth at +1150.
The NYSE and Nasdaq both had more new lows than new highs. I’m half willing to forgive that because we started the day off weak in the others. In fact, mid-morning, having been down early on, we saw fewer stocks make new lows, which I would put on the positive side of the ledger.
By the end of the day, Nasdaq had more new lows than Friday. Not by much, but my point is the new lows were expanding even after the market turned. If we want the others to get going, then we need that to stop.
And new highs? Pathetic.
And all of this with the bonds down on the day (interest rates up).
I really would like to see the others stay down or mill around for another couple of weeks because I do think that would at least get them to an intermediate term oversold condition.
New Ideas
I am still waiting for Tesla TSLA to get to that 200 area. My stop has been around 170 and while it seems very far away now I still think that’s the area.
Once again I was asked to follow up on Amazon AMZN which has gone nowhere for months. I have maintained that I thought the stock was okay and just consolidating and I still think it is okay. I would however not like it if it breaks under that 175 area. Otherwise it should eventually breakout to the upside.
Today’s Indicator
The 30 day moving average is heading toward an oversold condition. The math says it ought to be there around July 1st. That’s why I would like the market to have some more downside in the final two weeks of the month.
Q&A/Reader’s Feedback
Berkshire Hathaway BRK.B is just another one of those stocks that has gone nowhere all year. It bends but doesn’t break. So as long as it stays over 400-ish it ought to be okay. And even if you look at the uptrend line it looks more like 390-ish. Get it over 420-ish and the stock gets much more interesting.
At least we can say that Atlassian TEAM has support down here. But it also has a lot of resistance at 170.
If you want to buy a down and out software stock, why not look at Workday WDAY? It met its measured target and has formed a W with not much resistance to speak of if it can get over that 215-16 area.
Typically I like a chart like Cloudflare NET because it is down and out but the stock has rallied ten bucks in a straight line. It ought to work on filling that gap; I’m just not sure if it pulls back 3-5 first.
I like the way Nucor NUE rallied off of bad news. But I think it runs into resistance 160-165.
