EB Daily Market Report - Friday, February 14, 2020
Executive Market Summary
- Wall Street is struggling to add gains today, with the majority of our key indices lower, albeit fractionally
- The 10 year treasury yield ($TNX) is down 4 basis points to 1.58%
- Crude oil ($WTIC) is up for 3rd consecutive session, nearing $52 per barrel
- A number of economic reports were out this morning, and every one of them matched expectations
- NVIDIA Corp (NVDA) is up solidly today after reporting earnings above estimates
- We have one active trade alert, which failed at its 20 day EMA earlier today
Market Outlook
I pointed out the 60 minute negative divergence on the S&P 500 two days ago and it remains a short-term concern. Well, the NASDAQ is in the same situation as you can see below:
The pink circles highlight the rising 20 hour EMA support, but if it breaks, that definitely would open the market up to more technical selling, in my opinion. I don't expect any selling to last long, but I want to let you know that quick 1% downside action, possibly more, wouldn't be a shock at all to unwind this hourly divergence.
Sector/Industry Focus
Distillers & Vintners ($DJUSVN) isn't the most exciting industry group in the world, but it's breaking out to join the bullish party:
The PPO is moving to new highs as well, so momentum is very strong here and suggests this rally isn't over. Constellation Brands (STZ) is one of the leading components and is performing well today, but it's still got a little work to do to make its own breakout.
Active Trade Alerts
Currently, we have one active trade alert, as follows:
DKS (-1.16%) - reports its next earnings on March 10th. DKS has once again approached its 20 day EMA and failed - at least thus far today. It's now consolidating between price support close to 43.25 and that declining 20 day EMA, currently at 45.40.
Strong Earnings ChartList (SECL)
Yesterday, I reviewed the best performing stocks on the SECL. Today, I glanced through the bottom 10-15 stocks and wanted the share the following charts:
LITE:
LITE was near 93 the past two days, but today's selling is moving it closer to a couple key support levels to watch.
SCWX:
The volume on SCWX has been extremely light as it pulls back. 15.00-15.20 has been an area of excellent price support and SCWX is part of the computer services industry ($DJUSDV), which has improved greatly the past 2-3 weeks.
Movers & Shakers
Here are two earnings-related movers today:
NVDA:
NVDA has been one of the best performing semiconductor stocks and continued that after reporting much better-than-expected quarterly earnings (1.89 vs 1.66) after the bell on Thursday. Future tests of the rising 20 day EMA will likely provide a solid reward to risk trade.
SVMK:
Here's another very solid earnings report from SVMK, a software stock ($DJUSSW). Unlike NVDA, SVMK was not an industry group leader prior to this earnings report, but that may be changing now. It's broken out relative to the S&P 500, but still needs a bit more strength to clear an important relative resistance line to its software peers.
Earnings Reports
Here are the key earnings reports for this week, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 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:
Friday, February 14:
AZN, ENB, PPL, YNDX. Others less than $10 bil: NWL, CGC
Monday, February 17:
None. Others less than $10 bil: SCI, GDI, FLS, RIG
Economic Reports
January retail sales: +0.3% vs. +0.3%
January retail sales less autos: +0.3% vs. +0.3%
January industrial production: -0.3% vs. -0.3%
January capacity utilization: 76.8% vs. 76.8%
Happy trading and Happy Valentines Day!
Tom