The Dow Jones Industrials Index led all comers yesterday with a 1.39% gain, or 331.67 points, as financial, industrial, and transportation stocks led. Many of these are seen as benefiting from so-called tax-reform policy. The S&P 500 Index rallied 0.82%, or 21.51 points. While the rally looked powerful in terms of the index move, NYSE advancers led decliners by only 1767 to 1213. Meanwhile the NASDAQ Composite Index rallied 49.58 points, or 0.73%, but breadth was negative as declining stocks led advancing stocks 1318 to 867. This is a stark divergence in breadth as many tech and internet names that were hit hard on Wednesday rallied feebly yesterday. Chinese-related names also came under pressure yesterday. Overall volume was higher on the NYSE but lighter on the NASDAQ.
The situation is currently mixed, and yesterday's move seemed a bit euphoric. This morning, futures continue to show a divergence as NASDAQ futures are down much more sharly than the S&P 500 futures, and Dow futures are flat. Expect that near-term volatility may be the order of the day as the Senate vote on its own version of tax reform moves to a vote.
Focus List Notes:
ANET is finding near-term resistance at its 10-dma. A retest of the 20-dema looks likely, and we would use the 20-dema as a maximum selling guide for the stock.
BABA ran into resistance at its 50-dma yesterday and closed down on a day when the market indexes were up sharply. Selling volume remas heavy. As noted in previous Focus List Notes, we considered the 20-dema to be your first selling guide, with the 50-dma serving as a maximum selling guide. The stock is now below the 50-dma, and a close below yesterday's intraday low would constitute a 50-dma violation.
CAT posted a pocket pivot yesterday on a strong-volume breakout from a five-week base.
FB is holding support at its 50-dma, which we would use as a maximum sellin guide.
NFLX is trading below its 50-dma and the prior base breakout point at 189.95. In our view this is a sell, although a break below the intraday low of two days ago would constitute a 50-dma violation, and one could wait for that if they wish to give the stock more room. That would not, however, be our preference.
NVDA was able to regain its 50-dma yesterday, but the $200 Century Mark remains a key level of support above the 50-dma. We would use the 50-dma as a maximum selling guide.
TTWO looks set to retest its 50-dma after bouncing off the line two days ago. Volume was very heavy yesterday as the stock closed near its intraday lows and up only a dime above the previous day's close.
WB dipped below its 20-dema but is holding above the left-side peak of its prior base at 108.30. We would use the 50-dma as a maximum selling guide.
Market Lab Report - Premarket Pulse for Friday, December 1, 2017
| Published: | 1 Dec 2017 09:05 ET |
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