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Market Lab Report - Premarket Pulse for Tuesday, February 13, 2018

Major market averages continued their oversold rally but remain below their 50-dmas. Volume declined from Friday's high levels. This implies that the rally could continue at least up to the 50-dmas. If the indexes continue blasting higher and clear the 50-dmas, then we are back to the typical post-sell-off "melt-up" that we have seen time and time again in a QE-dominated market. While the indexes bounce sharply, however, broken down former leaders still remain in near-term downtrends.

Futures are trading lower after the bounce. More than three-fifths of the companies on the S&P 500 have reported earnings, with nearly 78 percent of them topping profit expectations which is above the 72 percent average beat-rate in the past four quarters. That said, companies have been aggressively buying back stock which artificially boosts earnings. 

Focus List Notes:
AMZN rallied back above its 20-dema on above-average volume.
NFLX also rallied back above its 20-dema, but on light volume.
NVDA is attempting to stabilize around its 20-dema, but was down yesterday in the midst of a strong index rally, closing just below its 20-dema.

All three of these names likely need to tighten up after several days of wide, volatile price ranges. Unless one is attempting to take advantage of deep sell-offs into areas of support, such as was the case with AMZN last Friday at the 50-dma, it is best to stand aside and wait for lower-risk set-ups to develop.

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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