23 Sep Mixed Market Breadth Due to Lack Of Conviction
Throughout the trading session, the market breadth exhibit mixed mode, this indicate lack of conviction from either buyers or sellers after the recent big run.
Advancers led decliners by a 3-to-2 margin at the NYSE, while decliners led advancers by a 4-to-3 margin at the Nasdaq.
Market participants remain optimistic about a soft landing scenario for the economy, but there's a growing sense that stocks are due for some consolidation.
DJIA rose by 0.15% and S&P 500 increased by 0.28%, this helped both to extend into record territory. NASDAQ also closed 0.14% higher. However Russell 2000 underperformed, dropping 0.3% after recently outperforming its peers.
Energy Sector Gained More Than 1%
S&P 500 Energy sector was the top winner with +1.31% with Crude Oil & Natural Gas up by +0.51%. S&P 500 industrial sector was up by +0.66% which was contributed by Boeing (BA) which was up +2.0% as it turned sharply higher after confirming a substantial increase in the machinist contract offer to end the strike.
We also saw many semiconductor stocks settled higher, that helped the PHLX Semiconductor Index (SOX) to close 0.5% above Friday's settlement.
TSMC (TSM) have a +0.4% up after a Wall Street Journal report mentioned that TSMC and Samsung are considering new chip-making facilities in the United Arab Emirates.
Note Yield 10-Year Settled Higher
The 10-year note yield settled six basis point higher at 3.757%, and the 2-year note yield settled four basis point lower at 3.591%.
Stocks To Watch
Constellation Energy (CEG), $Vistra Energy Corp.(VST)$ , and Public Service Enterprise Group (PEG) extended gains following Constellation's deal to supply power to Microsoft from a reopened Three Mile Island nuclear site. Constellation saw a 23% surge on Friday, its largest-ever percentage increase, continuing to rise on Monday.
$Boeing(BA)$ shares rose 2.7% after the company improved its contract offer for 33,000 striking machinists. The new offer includes a 30% pay hike over four years and a doubled ratification bonus of $6,000. Boeing has faced significant cash flow constraints, leading to hiring freezes and furloughs.
Even though the contract offer improvement is well received now with a 2.7% rise in stock price, but I would think BA stock price is still on the downside as it is trading far away from short-term and long-term MA, the MTF is also giving downtrend signal.
$Shopify(SHOP)$ extended its gains for the seventh straight session, closing 1.77% higher at $80.11. The stock has risen 10.02% over the last six sessions, buoyed by the Federal Reserve's 50 basis points rate cut. Shopify has delivered a 2,600% return since its 2015 IPO, with revenues growing at 49% annually.
There is potential for Shopify to go higher as MTF signal is giving a strong uptrend, and with the stock price trading above both the short-term and long-term MA, this stock looks promising to enter.
$Tesla Motors(TSLA)$ was among the biggest gainers in the S&P 500, with analysts optimistic about its Q3 deliveries report. Recent data shows strength in China offsetting weakness in Europe. Goldman Sachs, Wolfe Research, and Barclays issued forecasts around the consensus estimate of 461,000 deliveries.
Tesla MTF is showing signal of more uptrend and the MACD is also giving upside confirmation, I am expecting Tesla to continue trading higher with the Q3 deliveries report expected to be strong.
Most of the Magnificent Seven stocks underperformed in Q3 but are now bouncing back. Meta Platforms (META), Apple (AAPL), Tesla (TSLA), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Nvidia (NVDA) have all shown recent gains, with Tesla up 9.02% over the last five days.
Summary
I am expecting market breadth to improve today (24 Sep) and investors conviction should be coming back as the profit taking yesterday should have diminished.
I think there will be some strong movement coming from the Mag 7 stocks.
Appreciate if you could share your thoughts in the comment section whether you think market would exhibit a positive bias and market breadth should improve.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
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