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Market Lab Report - Premarket Pulse 4/6/17

Published : April 6 2017 at 9:18 ET

Major averages reversed course finishing near the low end of their trading ranges on higher volume after the Fed's minutes were published.

The committee revealed that it would like to start gradually, and predictably, reducing the Fed's balance sheet later this year. Fed officials from the minutes of its March meeting said they supported a gradual pace of rate hikes. Traders took this to mean that the central bank was on track to raise the U.S. benchmark interest rates at least twice this year. The Minutes also showed that some Fed officials viewed stock prices as 'quite high' by standard valuation measures.

On a positive note, outgoing Federal Reserve Governor Daniel Tarullo said the second-quarter GDP numbers were likely to improve based on strong economic data in job growth, orders for durable goods and business investment.

Nevertheless a number of factors are keeping markets on edge, among them, President Trump's upcoming meeting with Chinese President Xi Jinping which kicks off today where they will discuss trade. 

Focus List Update

AMZN pushed further above the $900 Century Mark and held 1% above that level by the close despite the market reversal. Volume was quite heavy as the stock gave up most of its gains on the day but still closed positive. We would watch for a high-volume breach of the 900 level as a cautionary sign.

COHR is testing its 20-dema, which has served as support for the stock since its buyable gap-upmove of early February.

MKSI has dipped below its 50-dma. This has served as near-term support so any potential violation of the 50-dma should be watched for.

MOMO pulled down to its 20-dema on above-average volume. If the stock breaks below the line, we would not be surprised to see it test the near-term lows in the 30-31 area.

NTES rallied back up into its 50-dma yesterday after busting the line on heavy volume Tuesday. It then reversed at the 50-dma to close in the lower half of its daily trading range. This could be turning into a late-stage failed-base (LSFB) type of short-sale set-up, and we would watch to see how the stock reacts to today's meeting between President Trump and Chinese President Li Xinping.

QTNA failed to retake its 50-dma on an analyst's upgrade, which in our view puts the stock in question. It may likely end up being removed from the Focus List this weekend.

Several other names on the Focus List are testing support currently, and should be watched for any potential breaches of support in the event of any continued market weakness coming on the heels of yesterday's bearish reversal. These include: BABA, BZUN, FB, JD, NFLX, and TTD.

SINA dropped below its 50-dma, which has served as near-term support. Watch for a violation of the line as a sell signal.

SNAP broke sharply lower yesterday on heavy volume. Based on our discussion of the stock in Tuesday's VoSI VooDoo Report, it looks like it is headed for a test of the 18.90 absolute low in the pattern.

TSLA failed to hold the $300 Century Mark, reversing back below the line yesterday on heavy volume. There is always the possiblity that a failure to hold the 300 level could bring the stock into play as a short-sale target based on Jesse Livermore's Century Mark Rule in Reverse.

VEEV closed below its 10-dma for the first time since breaking out in early March. the stock appears set to test lower levels of support, so investors who purchased the stock near the 10-dma and 20-dema in early March could consider taking profits.


This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2017 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.