The S&P 500 Has Broken To the Upside of a Short-Term Bearish Trendline
Jason Lubin September 28, 2020 11:00 PM
Companies reporting earnings this week include MU, MKC, PEP and STZ.
On Tuesday, Micron Technology (MU) is anticipated to release fourth quarter EPS of $0.96 vs $0.56 last year on sales of $5.9 billion compared to $4.9 billion a year ago. The Co manufactures memory chips and on September 1st, Dow Jones revealed that the Co launched its new form of dynamic random-access memory (DRAM), the GDDR6X, in Nvidia's new RTX 3080 and 3090 graphics processing units (GPU). Looking at a daily chart, the RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is above its 20 and 50 day MA (respectively at $47.78 and $48). We are looking at the final target of $54.70 with a stop-loss set at $45.60.
Additionally on Tuesday, McCormick (MKC), a global supplier of seasonings and other flavorings, is expected to announce third quarter EPS of $1.52 compared to $1.46 a year ago on revenue of $1.4 billion vs 1.3 billion last year. The expected move based on front-month options is 7.2%, the last time the Co reported earnings the stock rose 3.6%. From a technical point of view, the RSI is below its neutrality area at 50. The MACD is negative and below its signal line. The configuration is negative. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at $197.93 and $198.34). We are looking at the final target of $175.50 with a stop-loss set at $196.70.
On Thursday, PepsiCo (PEP) is likely to unveil third quarter EPS of $1.48 vs $1.56 last year on revenue of $17.2 billion, in line with the previous. PepsiCo is one of the largest international beverage and food companies, and on September 22nd, Vail Resorts and the Co announced the renewal and expansion of their product distribution partnership to a total of 33 Vail Resorts locations across North America. In addition, both companies pledged to achieve a zero net operating footprint by 2030. From a chartist's point of view, the RSI is below its neutrality area at 50. The MACD is negative and below its signal line. The configuration is negative. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at $135.5 and $135.71). We are looking at the final target of $123.90 with a stop-loss set at $135.40.
Also on Thursday, Constellation Brands (STZ) is awaited to post second quarter EPS of $2.50 compared to $2.72 a year ago on sales of $2.2 billion vs $2.3 billion last year. The Co is the world's largest producer and marketer of branded alcoholic beverages, and its current analyst consensus rating is 15 buys, 5 holds and 1 sell, according to Bloomberg. Technically speaking, the RSI is below its neutrality area at 50. The MACD is below its signal line and positive. The MACD must penetrate its zero line to expect further downside. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at $188.46 and $181.65). We are looking at the final target of $168.10 with a stop-loss set at $187.00.
Looking at the S&P 500 CFD
on a 30 minute chart, the index has broken out to the upside of a short-term bearish trendline that price has been holding below since mid-September. Price will likely continue its advance to its 3,375.00 resistance level. If price gets above 3,375.00 then it will probably reach for 3,429.00. If price gets above 3,429.00 it would a very bullish signal, because the 3,429.00 level acted as strong resistance in mid-September that price failed to get above. So if price breaks out to the upside traders could see a rally all the way up to 3,486.00. On the other hand, price could dip back to the 3,300.00 support level where a bounce could occur. If price cannot manage to bounce off of 3,300.00 then traders should look to 3,221.00 as support. If price cannot rebound off of the 3,221.00 support level, it would be a bearish signal.
Source: GAIN Capital, TradingView
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.