Market Lab Report - Premarket Pulse 8/26/16
Major averages closed near break even yesterday on lower volume. The NASDAQ Composite found support at its 20-day moving average while the S&P 500 pierced its own 20-day line.
U.S. second quarter GDP came in at 1.1% compared with the preliminary print of 1.2%. Futures rallied mildly on the news, and are currently off slightly ahead of Fed Chair Janet Yellen's speech which starts at 10 a.m. EDT. She must tread carefully with her words since the Fed wants to keep US markets as the tallest standing midget.
Twilio (TWLO) has been getting hit with some valuation downgrades to "hold" from some analysts. When a leading stock such as TWLO gets downgraded on this basis, a lower entry price can offer a favorable buying opportunity. TWLO is currently heading toward its 20-day line. Volume on today's pullback was less than prior days which is constructive. Keep an eye out for volume dry ups (VDUs) and always know your sell stop so you know your potential downside.
RV component maker Drew Industries (DW) had a continuation pocket pivot breakout. We originally reported on DW on August 4th when it had a pocket pivot on strong earnings. Earnings are skyrocketing, sales are accelerating, institutional sponsorship has grown over the last 6 quarters, group rank 5.
Medical device maker Boston Scientific (BSX) had a pocket pivot off its 50-day line. This has been a slower mover but the proximity to its 50-day offers a lower-risk entry point. Earnings and sales are accelerating and its prior two gaps higher on earnings may help the stock's momentum.
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