The rally from recent lows leaves the S&P 500 within striking distance of new all-time highs. Can this be reached before the new year? Will we get the 'Santa Claus Rally'? We shall see on Monday. Remember - it's a short trading week.
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The value buyers lifted the stock off the recent lows, though, like MCD - have failed to push the stock back into 'bull territory'. The bears are still solidly in control of this stock - and Google remains stuck in a down-channel. Watch for two levels - 515 and 525. Which one gives?
The rally off recent lows took a pause at the 50 DMA - and as you're read many times on this page - MCD stock can't get back on the bull-run unless it gets above these moving averages. Watch 94 for resistance.
After two days of gains, it looked like Apple was poised to break out of a recent down trend to resume the march to new highs. However, while the general market rallied on Friday, Apple took a break. So, what now - it's hard to say. The next few trading sessions will show a lot.
After a rapid descent due to oil crashing, The Dow Jones Industrial Average recovered almost all of the losses in two explosive trading sessions. Today, the Dow was up an astounding 420 points and new highs seem inevitable now. Can anything stop this bull market - even oil continuing to drop? It's almost as if traders just said 'forget oil, we're buying.'
What say you - does the drop in oil make you more or less bullish on the market? After two days of bucking the 6 month down-trend in prices, the decline sets it once more in oil. Can 54 hold? It's been tested 3 times and so far HAS held. However, if it fails after 3 tests, it means much lower pricing - as in - the 30's are possible.
Let's look at it the other way - what if 54 DOES hold? Does that mean all-time highs again for the market? IF, and I do mean if, oil holds 54 - yes, there will be new all-times highs for SPY. Watch 54 carefully, it's an important fulcrum. Apple has risen from a break of the 50 DMA - and recovered a chunk of the sell-off losses. However, the stock is still stuck in a down-channel until it breaks above 112. Will it or will it continue the mini-decline from the recent high? Watch 108 and 112 as the numbers to break in either direction.
Value hunters big McDonald's up from recent lows - sending the stock to its strongest day in a many months. Two questions - what does it mean? And Can it last?
I don't know if it lasts, but the value buyers are clearly eyeing the dividend. At the low of 88 hit the other day, MCD yield swelled to almost 3.9% - I'll take that all day. So, what now - I think at 91.65 - Hold and wait for more information. I wouldn't be selling here however - and buying can't be a big mistake. The decline was so severe in Google, I have to post twice on it. There was a blitz of selling right in the final hour to push the stock down below 500 - closing at almost the exact lows of the day at 498.16. It was a close on high volume, which is a bad bear sign for this stock. Meaning - I don't believe we have seen the lows for Google. Expect lower pricing. Yes, I've been saying that since the stock made lower highs at 590. Lower highs and lower lows are bad for a stock and it's played out in Google. Watch for a break below 485.
The sell-off in Google is increasing, much like the fall in oil. The 52 week low of 511 did NOT hold and it's likely 500 won't either. So, what to do now.
My opinion is Google is a buy at current levels, but that it might be possible to 'wait' and get it at a better price. However, if you've been waiting to invest in Google, but the high price has stopped you, don't get too greedy - because like when Apple was trading at it's lows, it might not last. So, how do you invest in companies that are falling? Buy in increments. If you want to invest 10,000 dollars into Google - buy in 4 2500 dollar blocks. Don't try to 'time' the market and get it in one shot. Buy at 505, 500, 495 etc. Be patient and have a plan. Good hunting! |