Last week, we saw not-so-great market action as the S&P 500 fell 2.67%.
Of the 104 industry groups, automobiles ($DJUSAU) performed 103rd out of 104 last week, falling 6.27%. Granted, much of the auto performance revolves around Tesla (TSLA), which is a huge component stock. However, I'm concerned about another name in the auto space, one that has been a very poor relative performer in the group. I'm talking about Rivian Automotive, Inc. (RIVN), which fell more than 14% last week and isn't far from its low since going public in November 2021. Here's the current chart:
Enter Rivian Automotive, Inc. (RIVN):
It broke out in late January to finally close above the 515-525 price resistance zone. Over the course of the last year, I count 19 previous attempts to clear this resistance zone without a single success. So the breakout is obviously a bullish development on the chart. But then there's the upcoming bullish seasonality for MSCI as well. Check out MSCI's seasonal strength since 2013. Most of it is in the first half of the calendar year, with significant strength over the next 3 months. Check this out:
While the overall market could be poised for a period of consolidation or selling, I believe we'll see buyers re-emerge on MSCI as we drift back into the 515-525 price support zone created by the late-January breakout.
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Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |
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