World markets are mostly red overnight with Europe down almost a percent and Asia got hit pretty hard. Shanghai is down 0.67% but the Nikkei is having another bout of extreme weakness, down 4% as
the Yen hit six-week highs.
S&P futures are down 5-7 handles giving some downside follow-through to yesterday’s break of the 1698-1702 actionable pivot. Yesterday did give some reasons to take off some risk for the intermediate-term active market participant. If you were looking for cues to get short, yesterday could have provided a small inflection point. It seems like IBD tweaked its big picture section as they went to “rally under pressure” a bit quicker than in the past..
In order for the Bears to keep some control they can’t let the bulls reclaim the 1698-1702 area. Support stands at the 21-day around 1682ish and then 1671 is a bigger spot. We will measure the next few sessions to see what type action we could see in August. Nobody “truly” knows, but if you made adjustments around that pivot you have some flexibility. I don’t think the highs of the year are in, but some volatility will be nice.
There has been lots of nice stock action as this earnings season has provided us with multiple set-ups for action.
In today’s Morning Call we will go over some stocks that showed some relative strength yesterday.
eBay Inc(NASDAQ:EBAY) had a big gap down on July 18 after the company missed its earnings estimate then dip buyers stepped in at the $51 area to contain the sell-off. The stock built a base at this level for a few sessions before seeing a spirited move yesterday that brought it back above all key moving averages. The stock showed some relative strength yesterday. It could try to fill the earnings gap at above $53.92.
Michael Kors Holdings Ltd(NYSE:KORS) spiked higher at the open yesterday after the luxury retailer posted earnings that nearly doubled. It sold off together with the broader market in the morning, but met some buyers at the upper level support of $67.85 and saw a strong rally off of lows. Holding above prior pivot high of $69.23 would be constructive for higher prices moving forward.
Mastercard Inc(NYSE:MA) absorbed debit card fees limit news that created a wide trading range in both MA and V last Wednesday. Yesterday MA tacked on another 1.80% after flagging at highs for two sessions. It looks a bit extended on the daily chart now and hard to chase, but its relative strength is something to notice. Some work above $640 to allow the key moving averages to play some catch up would be healthy for higher prices.
Workday Inc(NYSE:WDAY) is a new issue that has a constructive looking chart. It saw a nice break out at the $70 level on Friday after grinding higher for almost two months. It’s now flagging nicely at highs showing healthy digestion of the potent break out. The stock also showed some relative strength yesterday. We now have an upper support of $72.19 to trade against.
Some mixed action in tech
Apple (NASDAQ:AAPL) had a