The Shakedown 9-27-20

LAST WEEK, S&P 500 (-0.58%)

Monday: +1.11%

Tuesday: +1.02%

Wednesday: -2.32%

Thursday: +0.27%

Friday: +1.62%

Stocks suffered their fourth consecutive losing week last week but gave great signs of life in a Thursday-Friday bounce. The good news about four straight down weeks is the lack of probability of a fifth consecutive losing week, very rare. Given the constructive bounce we saw in the latter half of the week, along with the plethora of support buys setting up in leading stocks leads me to believe we'll bounce this week.


The 11% controlled pullback in the S&P has given a falling hourly wedge (second chart down) where we will get plenty of information regarding whether or not we bounce this week. The crucial area for the SPY is this 330-332 resistance area, if we see some heavy buying in that area, that could be the start of a bounce. If we see stocks give a major failure in that area, it could all be a fake-out move before we head back lower once again. Have to take all scenarios into account.


News-wise, the market really wants to see some fiscal stimulus out of the government. That could be the catalyst the market needs to hear to get back in the uptrend, so we have to watch how things develop there this week. 

Earnings This Week

Click the above picture for a full list of the companies reporting this week

AMD Long

AMD has been a leader in the semi conductor space this entire year and it looks to continue this week. Fundamentally, their growth trajectory is yielding the type of breakout we've seen in the stock price this year. After a 22% pullback from highs, along with some constructive consolidation at support, AMD looks like it may be ready to march higher from here.

Technically, you have to love the type of work buyers did the past two weeks holding onto this earnings gap support. It could not pierce that area no matter what was going on with the broad market. On the weekly chart, we got a tight inside week, holding upper level support in the strongest name in one of the strongest sectors. The semiconductor sector as whole appears ready to break higher out of a tight consolidation (pictured below).

While this one did make some nice moves Thursday and Friday, there's still plenty of opportunity for us to buy through 79 this week. 

Trigger: $79

Stop: $73.89

Target: $94+

Click Below for this week's Watchlist

Hope to see you in the chat Monday!

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