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Market Lab Report - Premarket Pulse 10/24/17

Major averages sold off on mixed volume marking yet another distribution day for the NASDAQ Composite. Distribution day clusters can suggest further downside, much as we saw in June and late July for the index.

A number of megacap technology stocks will be reporting earnings in the coming days such as AMZN, FB, and GOOGL.

CAT is gapping higher by 6.9% in pre-market action after reporting better-than-expected earnings and revenues and issuing above-consensus guidance. Similarly, MMM is up 3.3% after also beating both top and bottom line estimates and issuing upbeat earnings guidance. Both names are components on the Dow Industrials. Biotechs on the other hand have been weak as BIIB is lower by 2.6% despite reporting better-than-expected profits and sales.

Focus List Notes:

BABA closed below its 50-dma on higher selling volume that was -6% below-average. The 50-dma can be used as a maximum selling guide for those more conservative with tighter stops. That said, a violation of the 50-day invokes the  Seven-Week Rule. If BABA trades below yesterday's low, it will have violated its 50-dma so should be sold.

FEYE had previously violated its 20-dma, which served as our tightest selling guide for any position bought on the September 7 buyable gap-up. It appears on track to test the 50-dma.

NFLX held support at its 20-dema yesterday, on increased but below-average selling volume. A breach of the 20-dema could potentially turn the stock into a late-stage failed-base (LSFB) short-sale set-up.

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. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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