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Stock Market Outlook for June 13, 2017

Energy and telecom sectors testing pivotal levels of support as they benefit from technology rotation.

 

Real Time Economic Calendar provided by Investing.com.

 

**NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates.   Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

  • No stocks identified for today

 

 

The Markets

Stocks closed marginally lower on Monday as investors brace for the 2-day FOMC meeting ahead. The S&P 500 Index shed a tenth of one percent with Energy and Technology book-ending the performance of the session.  Rotation remained very much alive throughout the day with investors continuing to book profits in some of the high flying technology names.  The widely held FANG stocks plus Apple have realized the brunt of the selling pressure, recording losses of between 4% to 8% in just the past two sessions; volume in these names has been over double that of the daily average.  The group, however, remains higher by over 20% year-to-date.  Negative momentum divergences on the charts of most of these momentum names have been recorded with the abrupt selloff, suggesting waning buying pressures.  Each have turned lower from trendline resistance; trendline support, in a number of instances, is well below present levels.

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We’ve highlighted financials as being one of the areas that have benefitted from the rotation.  The energy and telecom sectors, two of the worst performing market segments this year, are also seeing benefits, gaining 0.67% and 0.90%, respectively, during Monday’s session.  The energy sector index has bounced from declining trendline support in recent days, moving back to resistance around the 50-day moving average.  As for telecom, the benchmark found support at the October low around 150.  Both the energy and telecom benchmarks are hovering around some very pivotal levels where a break of the horizontal limits directly below could entail significant losses to follow.  The benchmarks have been essentially unchanged for the past decade, unable to gain traction to push firmly to new highs.

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Sentiment on Monday, as gauged by the put-call ratio, ended close to neutral at 0.96.

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Sectors and Industries entering their period of seasonal strength:

Biotech Industry Seasonal Chart
S5BIOTX Index Relative to the S&P 500S5BIOTX Index Relative to the Sector

S5BIOTX Index Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

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S&P 500 Index

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TSE Composite

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