EB Daily Market Report - Tuesday, April 27, 2021

Tom Bowley - April 27, 2021

Executive Market Summary

Futures were mixed overnight and at the opening bell, but sellers have become more dominant this morning
Small caps ($SML) and mid caps ($MID) have avoided the selling and lead on a relative basis
Commodities are mostly higher as crude oil ($WTIC) jumps nearly 1% and back above $62 per barrel
The dollar (UUP) is flat today, but the recent downtrend is no doubt lifting commodities
The 10-year treasury yield is up 2 basis points to 1.59% as it attempts to clear its 20-day EMA for the first time in two weeks
Energy (XLE, +0.71%) leads a mixed group of sectors as 5 are higher, while 6 are lower; health care (XLV, -0.49%) is today's laggard thus far
Tesla (TSLA, -4.25%) beat its earnings expectations, but is currently trading just beneath its 20-day EMA, a level to watch as we approach today's close

Market Outlook

U.S. equities have a historical trend of moving higher from late April through May 5th. Here are the S&P 500 (since 1950) and NASDAQ (since 1971) annualized returns during this upcoming period:

S&P 500 (April 28th through May 5th): +30.16%
NASDAQ (April 29th through May 5th): +55.21%

Given yesterday's chart showing the bullish patterns on the NASDAQ, it's noteworthy that history supports upside action in the event we see the breakout.

Sector/Industry Focus

Energy (XLE) is leading the market today and I see a bullish wedge that could lead to much further upside, if broken:

I've drawn two blue circles that mark key potential technical developments. A break above the downtrend line in the bullish wedge, along with a move above the 50 day SMA would likely coincide with a bullish PPO centerline crossover. That would confirm that a new uptrend is very likely underway.

ChartLists/Strategies

Since I'm sending this DMR out early, I decided to run the High Volume scan from our website against our Strong Earnings, Strong Future Earnings, and Raised Guidance ChartLists and see if there were any interesting trade candidates, whether breakouts, possible support tests, etc. I adjusted the intraday volume requirement to at least 75% of average daily volume. Here were the 12 companies that met the scan requirements:

The two that I find most interesting are SGH and TGB.

SGH:

SGH was one of the stocks I discussed last week during the Sneak Preview - Q1 Earnings. Its earnings reaction was quite strong and it's been a semiconductor leader. The recent selling could present a solid opportunity for those with a higher risk tolerance as it's quite volatile.

(Disclosure: I own shares of SGH)

TGB:

I don't typically buy mining stocks and I also don't typically buy 2 dollar stocks. But TGB does look interesting, especially if it finishes strong today. Volume was of the confirming variety yesterday on its breakout and its PPO shows bullish momentum is building.

Earnings Reports

Here are the key earnings reports for the next two days, 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 that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies you own or are considering owning.

Tuesday, April 27:

MSFT, GOOGL, V, NVS, LLY, TXN, UPS, AMGN, SBUX, RTX, GE, MMM, SYK, AMD, MDLZ, FISV, BP, CB, SHW, ABB, MMC, ECL, COF, ILMN, WM, UBS, PINS, ROP, MSCI, CNC, CSGP, GLW, ADM, PCAR, EQR, DTE, MXIM, YUMC, SYF, OKE, EIX, ENPH, TER, TRU, ESS, IEX, PFG, BXP, PPD, ACGL, ENTG, PHM, UDR, HAS, CHRW, FFIV, IVZ, HUBB, CRSP, ST, PII, JNPR, MANH, TX, BYD, JBLU, OLN, RXN, NCR, CROX, GPK, FEYE, AWI, TENB, ABG, APAM, SSTK, MATX, NAVI, USNA, SYX, AUDC, ATEN

Wednesday, April 28:

AAPL, FB, QCOM, BA, SHOP, SONY, SNY, NOW, GSK, ADP, NSC, CME, EQIX, MCO, BSX, HUM, GD, SPOT, ALGN, F, PSA, EBAY, APH, ORLY, AFL, YUM, SWK, WELL, ROK, WCN, TDOC, GRMN, AVB, SIRI, UMC, URI, GIB, IR, YNDX, ETR, HES, MGM, EXR, LOGI, AVTR, INVH, HOLX, DISCA, TYL, RJF, MAA, ROL, CINF, PTC, DRE, AVY, ATUS, MAS, TDY, MKL, MOH, RE, CREE, NLY, ICLR, IPG, TECK, TEVA, PEGA, AZPN, OC, SC, CLR, MLCO, CONE, OSK, AER, PAG, WH, SLAB, GRUB, SAIA, BPOP, PPC, ASGN, HELE, ALSN, SLGN, AUY, INOV, WING, R, FORM, MC, MTH, TROX, WERN, EAT, TWOU, CAKE, UCTT, LC, PI, RBBN, OII, NBR, AXTI

Economic Report

February Case-Shiller HPI: +1.2% (actual) vs. +1.1% (estimate)

February FHFA HPI: +0.9% (actual) vs. +0.9% (estimate)

April consumer confidence: (actual) vs. 112.0 (estimate)

Happy trading!

Tom