Weekly Report | Aug 25, 2024 + FSLR, SMCI, VRT
Weekly Report | Aug 25, 2024 + FSLR, SMCI, VRT
What is included in this week's edition?
WEEKLY REVIEW: An overview of current market standing, fundamental matters with implications upon the market, and general sentiment regarding the major US indices.
LOOKING AHEAD: Key takeaways to consider as we look forward to the upcoming trading week.
MARKETS: A technical review of the major indices and commodities that represent the overall health of the market.
Market Trader by MyntBit | Issue# 32
This week, markets experienced an upturn as the Federal Reserve’s (Fed’s) Jackson Hole Symposium reinforced expectations for a rate cut in September, and other economic data supported the narrative of a soft landing. Fed Chair Jerome Powell’s remark that “the time has come for policy to adjust” was well-received by investors. In economic releases, S&P Global’s Purchasing Managers’ Index (PMI) for manufacturing dropped to its lowest level this year, while the services PMI showed improvement, widening the gap between the two sectors. Housing market data also delivered positive signals, with rate-cut expectations boosting activity in both new and existing home sales. However, the tech sector faced some pressure due to disappointing earnings reports.
Overall Stock Market Heatmap
Sector Performance
Looking Ahead to the Upcoming Week
Looking ahead to next week, investors will be closely monitoring personal consumption expenditures (PCE) inflation, personal spending, and personal income data for July, along with the second estimate of second-quarter gross domestic product (GDP). Other important updates include consumer confidence from The Conference Board, pending home sales, durable goods orders, and wholesale inventories.
Economic Events
Earnings Event
Markets
Below are the levels for the upcoming week - updates will be provided on X (previously Twitter) throughout the week.
SPY - SPDR S&P 500 ETF Trust
Short Term (1-2 weeks): Bullish. Momentum is strong, with a likely test of $575.
Medium Term (1-3 months): Bullish. The trend supports further upside, targeting $580 if current support levels hold.
Long Term (3+ months): Bullish. As long as SPY stays above $500, the long-term uptrend is intact.
QQQ - Invesco QQQ Trust Series 1
Short Term (1-2 weeks): Bullish. Momentum is strong, with a likely test of $500.
Medium Term (1-3 months): Bullish. The trend supports further upside, targeting $500 if current support levels hold.
Long Term (3+ months): Bullish. As long as QQQ stays above $400, the long-term uptrend is intact.
IWM - iShares Russell 2000 ETF
Short Term (1-2 weeks): Bullish. Momentum is strong, with a likely test of $225-$230.
Medium Term (1-3 months): Bullish. The trend is positive, and as long as IWM stays above $210, the outlook remains favorable.
Long Term (3+ months): Bullish. The long-term trend is intact, with targets of $240-$250 on the horizon.
DIA - SPDR Dow Jones Industrial Average ETF Trust
Short Term (1-2 weeks): Bullish. Momentum is strong, and the price is likely to test the $420 resistance level soon.
Medium Term (1-3 months): Bullish. The trend is positive, and as long as DIA stays above $395, the outlook remains favorable.
Long Term (3+ months): Bullish. The long-term trend is intact, with potential to reach $430-$440.
VIX - Volatility S&P 500 Index
Short Term (1-2 weeks): Bearish. The VIX is likely to continue its decline, potentially testing support around $14.50.
Medium Term (1-3 months): Neutral to Bearish. If the market remains stable, the VIX could stay low, but any sudden market events could cause a rapid spike.
Long Term (3+ months): Neutral. The VIX could remain subdued unless there are significant market disruptions.
Last Week's Watchlist
ENPH - Enphase Energy
ENPH broke upside, and upside target is hit at 122.95. Will be removed from the list.
MSTR - MicroStrategy Inc.
MSTR broke upside, and is yet to hit our target.
Bullish Case:
Short-term: If MSTR holds above $126.59 and breaks above $140.00, it could target $159.14. A sustained move above $140 would be the first sign of a potential trend reversal.
Medium-term: Continued strength could push the stock towards $159.14 and potentially higher, but this would require strong buying interest and a broader market rally.
ABNB - Airbnb, Inc.
ABNB has not broken on either direction.
Bullish Case:
Short-term: If ABNB can hold above $113.27 and break above $119.13, it might target $123.77, which could be a significant recovery level.
Medium-term: Sustained strength could see the stock attempting to close the gap towards $140.82, but this would require a strong market sentiment and broad-based buying interest.
Bearish Case:
Short-term: A break below $113.27 would likely push the stock down to retest the $110.38 level, and a failure here could see a drop to the downside target of $103.55.
Medium-term: Continued weakness and a lack of buying interest could see the stock testing lower levels, especially if the broader market remains under pressure.
GOOGL - Alphabet Inc.
GOOGL broke on the upside, has not hit the target.
Bullish Case:
Short-term: If GOOGL can maintain above $157.71 and break above $165.06, it could target $174.05, which is a significant recovery level.
Medium-term: Sustained strength above $165.06 could see the stock attempting to close the gap towards $180, especially if the broader market supports a bullish sentiment.
Stock Watchlist for the Upcoming Week
FSLR - First Solar, Inc. (Freebie)
Bullish Case:
Short-term (1-2 weeks): The stock could see a continuation of its upward momentum if it breaks above $231.07, with a target of $266.56.
Medium-term (1-3 months): Sustained buying could push the stock towards its previous highs near $300, especially if market conditions remain favorable.
Long-term (3+ months): If the stock holds above $231.07, it could enter a new uptrend, targeting levels above $300.
Bearish Case:
Short-term: If the stock fails to hold above $220, it could retrace towards $212.20 and potentially lower to $195.27.
Medium-term: Failure to maintain current levels could lead to a prolonged consolidation phase, with a possible move towards $180.
Long-term: Continued weakness below $195.27 could see the stock consolidating in a lower range, possibly between $150 and $200.
Options Opportunity
Call Option: Consider buying calls if the stock breaks above $231.07, targeting $266.56.
Put Option: Consider buying puts if the stock fails to hold $220, with a target towards $195.27.