EB Daily Market Report - Monday, November 25, 2019
Special Note
Our services will be modified a bit this week since it's Thanksgiving Week here in the U.S. There will be no Trading Places LIVE on Wednesday morning at 9am EST. Also, there will be no Daily Market Report on either Wednesday or Friday of this week. I will be hosting a Market Vision 2020 mini-series, however, on Friday beginning at 11am EST. I'll be discussing "The Creation and Design of Winning Portfolios". While we've been requiring subscription to the free Market Value 2020 newsletter in order to receive room instructions for these mini-series events, we will waive that requirement for our EarningsBeats.com members and will make sure you receive room instructions as well. This event will be recorded for those unable to attend live.
If you'll be traveling this week for the holidays, please be safe! On behalf of the entire EarningsBeats.com team, I wish those celebrating this week a very Happy Thanksgiving!
Executive Market Summary
- All of our major indices are higher to start the Thanksgiving week
- Small caps are exploding higher and threatening a major breakout
- Technology (XLK), healthcare (XLV) and industrials (XLI) are leading today's action
- Defensive sectors, along with energy (XLE), are trailing
- Charles Schwab (SCHW) and TD Ameritrade (AMTD) officially announced their $26 billion combination
- Semiconductors ($DJUSSC) and biotechnology ($DJUSBT) are both performing very well today
Market Outlook
I really want to see two areas of the stock market confirm breakouts. I've mentioned these before. Transports ($TRAN) and small caps ($SML). Both are charging higher today. Below is a current chart of the TRAN, showing overhead price resistance that still must be negotiated:
A break above 11200 is really what I want to see. The green circles highlight what appeared to be 20 day EMA failures, only to the group quickly recover. That could be a signal of institutional accumulation before a big breakout. Stay tuned.
Sector/Industry Focus
Small caps ($SML) have underperformed for a long time, but reversing that first requires an actual breakout in the index:
The red circle shows that the SML is right back into its key price resistance zone from 980-1000. We have tried to break through here on so many occasions that if we can finally do it, I'd expect to see a ton of buyers jump in. Small caps have been underperformers for nearly 18 months. If we see an absolute breakout, I'd also look for relative strength as well.
Strong Earnings ChartList (SECL)
As of 12:30am EST, I ran a scan of our SECL to identify stocks that have traded more than .75x their average daily volume. Here was the scan code:
The idea is to find stocks that have traded 75% of their normal volume already, even though we haven't quite reached the halfway point of the day. Here are today's stocks that meet this criteria:
ALLY, ALNY, ATRS, CLVS, CRSP, EVRI, GSK, LK, RDFN, RS, TDOC
RDFN seems to be at a key price support level:
RDFN is not in a great area of the market, so I'd be very cautious here. If that rising 20 day EMA is lost, I'd make sure I keep a very tight stop in play.
Active Trade Alerts
We're currently looking to add a couple trade alerts. I think it's important to mention that we do not use Active Trade Alerts to attempt to fill out a portfolio. We currently have 40 stocks in 4 different portfolios (Model, Aggressive, Income, and Value) for that. Instead, tracking occasional alerts is really designed to provide education on how we manage short-term trades, win or lose.
Movers and Shakers
I ran a scan similar to the one I ran above for the SECL, only this one applied to the entire NYSE. I also changed the required volume level to 1.25x average daily volume. I further sorted it by including only stocks with SCTR scores over 80 (strong relative performers). Here are the scan results:
SSI, TIF, AXE, SWM, RUBI, CFX, SCHW, GMED
CFX is bouncing almost exactly where I would have expected it to - at the top of gap support:
Volume trends are strong and relative strength shows that CFX is a leader. I've discussed the improvement of the industrial machinery group ($DJUSFE) on multiple occasions recently.
Earnings Reports
Here are the key earnings reports for this week, featuring stocks with market caps of more than $5 billion. I also include a few select companies with market caps below $5 billion. Finally, any portfolio stocks (or active trade alerts) that will be reporting results are highlighted in BOLD. Please make sure you check for earnings dates for any companies you own or are considering owning:
Monday, November 25:
A, PANW, HPE, JEC, PVH, NTNX. Others less than $5 bil: ARWR, BECN, AMBA
Tuesday, November 26:
BNS, VMW, ADI, DELL, ADSK, HPQ, DLTR, HRL, VEEV, KEYS, BBY, BURL, MOMO, EV. Others less than $5 bil: CBRL, DKS, BOX, GES, ANF
Wednesday, November 27:
DE. Others less than $5 bil: None
Thursday, November 28:
None
Friday, November 29:
None
Economic Reports
None
Happy trading!
Tom