(To download the stock / ETF ranking model for free, please visit FocalEquity.com. Most traded stocks and ETFs can be found in the Excel output file. Note: quintile ranking 1 = best, 5 = worst.)
It’s the last trading day before the long Labor Day weekend. Volume is going to be light. Once again, due to the holiday season, we are doing a somewhat of light market update and highlight two stocks and discuss briefly QQQ, NASDAQ-100 Index.
NFLX is definitively bearish at the moment. The stock dropped close to 30% from its peak of over $300 this year. Now it’s 14-day SMA is declining. The stock found support at the 50 SMA but now 14-day SMA is a solid resistance. A good short position can be initiated at the declining 14-day SMA at $255 if the stock even bounces to that point. With the ATR measure at 23, it is quite clear that the uptrend of this stock is officially over, at least for the short term.
BID is not particularly bullish. But we expect the stock get up to the 50 SMA at $43. Currently the ATR metric is quite elevated indicating a high degree of volatility. The last time this happened, the stock had nice rally.
The Nasdaq-100 index in deep trouble. The only viable support for this index is the 200 SMA. This index is worse than both the situation of S&P and Dow. Technology sector often can be leading indicators of what is about to happen to the broad market.