The Market Direction Model (MDM) remains on a BUY signal.
Big-stock NASDAQ names reported this past week, but as Facebook (FB) has declined and Tesla (TSLA) persists in its ascendancy, TSLA has now replaced FB in the S&P Five, consisting of the five-largest weighted stocks on the S&P 500. TSLA, along with Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), and Microsoft (MSFT) now make up a fourth of the S&P 500 Index by weighting. If we add three other big-stock NASDAQ names, Netflix (NFLX) and Nvidia (NVDA), along with FB, to the mix, we have a list of eight stocks that comprise over 50% of the NASDAQ 100 Index by weighting.
While GOOG (still within buying range of its Wednesday breakout), MSFT, NFLX, NVDA, and TSLA power higher, we note some potentially actionable set-ups in AAPL, AMZN, and FB as they pop up off of recent lows. AAPL broke below its 50-day moving average on Friday morning before recovering to shakeout at the line and trigger a moving average undercut & rally (MAU&R) move where the 50-day line then serves as a selling guide.
Amazon (AMZN) gapped down Friday morning after reporting earnings on Thursday afternoon and busted its 200-day moving average early in the day before turning back to the upside. It then rallied back above the 200-day line for an MAU&R long entry where the line now serves as a selling guide. AMZN ended the day seven cents above its 50-day moving average.
Facebook (FB) broke below its 200-day moving average on Tuesday after reporting earnings on Monday after the close, but it too has recovered on an MAU&R move back above its 200-day line where the line now becomes a selling guide. These are interesting recoveries in three big-stock NASDAQ leaders and if AAPL, AMZN, and FB can build upon the current MAU&R long entry signals they could add fuel to the current market index rally.
Bitcoin ($BTCUSD) remains near its recent highs after backing down from a double-top breakout position two weeks ago. So far, $BTCUSD has been able to hold near-term support at the 20-day exponential moving average.
Crypto-related stocks tends to mimic the action of Bitcoin ($BTCUSD) such as Coinbase Global (COIN) which has rallied up the right side of a large bowl-like structure as it approaches its prior IPO highs. On a closing basis, COIN is in fact sitting right along those prior highs and, like $BTCUSD may take some time to consolidate the sharp gains since we reported on the stock in a Pocket Pivot Report dated October 6th. For now, the 10-day moving average has served as near-term support although we would not be surprised to see a test of the 20-day exponential moving average (green) as it quickly rises.
In early October we reported on developing pocket pivot action in Lithium Americas (LAC) as it began a 45% move higher from that point. The stock continues to move higher and is expected to report earnings this Thursday, November 4th, before the open.
Other lithium names have begun to show strength on pocket pivot breakouts, including Livent Corp. (LTHM) which is expected to report earnings on Thursday after the close.
Albemarle (ALB), the second-largest producer of lithium in the world, has also broken out in a big-volume pocket pivot move. It is expected to report earnings on Wednesday, November 3, after the close with a conference call scheduled for Thursday morning. Shortages of various kinds, from aluminum to coal and copper to uranium have driven price moves in a variety of stocks seen as beneficiaries of such shortages. Lithium is another one to add to this category as a primary component in electric-vehicle batteries. The "wolf pack" move we are seeing in these stocks ahead of earnings reports this week is interesting, and we look forward to seeing what actionable set-ups, if any, might transpire once earnings are out.
Some interesting post-earnings action: Repligen (RGEN) posted a pocket pivot at the 50-day moving average on Friday after the company reported earnings the night before. Thursday's volume bar might be inflated by after-hours trade once RGEN reported earnings. If not then RGEN will have posted two pocket pivots in a row at the 50-day line, where the 50-day line serves as a selling guide.
