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Stock Market Outlook for March 27, 2018

S&P 500 Index bounces from its 200-day moving average as technology tops the leaderboard.

 

Real Time Economic Calendar provided by Investing.com.

 

*** 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:

Brandywine Realty Trust (NYSE:BDN) Seasonal Chart

Brandywine Realty Trust (NYSE:BDN) Seasonal Chart

LendingTree, Inc. (NASD:TREE) Seasonal Chart

LendingTree, Inc. (NASD:TREE) Seasonal Chart

Dean Foods, Inc. (NYSE:DF) Seasonal Chart

Dean Foods, Inc. (NYSE:DF) Seasonal Chart

United Dominion Realty Trust (NYSE:UDR) Seasonal Chart

United Dominion Realty Trust (NYSE:UDR) Seasonal Chart

Macerich Co. (NYSE:MAC) Seasonal Chart

Macerich Co. (NYSE:MAC) Seasonal Chart

R.R. Donnelley & Sons Company  (NASDAQ:RRD) Seasonal Chart

R.R. Donnelley & Sons Company (NASDAQ:RRD) Seasonal Chart

Equity Residential (NYSE:EQR) Seasonal Chart

Equity Residential (NYSE:EQR) Seasonal Chart

AvalonBay Communities, Inc. (NYSE:AVB) Seasonal Chart

AvalonBay Communities, Inc. (NYSE:AVB) Seasonal Chart

Boston Properties, Inc. (NYSE:BXP) Seasonal Chart

Boston Properties, Inc. (NYSE:BXP) Seasonal Chart

General Dynamics Corporation  (NYSE:GD) Seasonal Chart

General Dynamics Corporation (NYSE:GD) Seasonal Chart

Cherokee, Inc. (NASD:CHKE) Seasonal Chart

Cherokee, Inc. (NASD:CHKE) Seasonal Chart

 

 

The Markets

There’s the bounce!  Stocks rebounded on Monday as concerns pertaining to a potential trade war alleviated amidst a report that China has offered to buy more semiconductors from the US in order to help cut its trade surplus with the country.  The Philadelphia Semiconductor Index jumped by over 4%, bouncing from its rising 50-day moving average and erasing Friday’s loss.  The sector sub-group is often looked to as a gauge of risk sentiment of the broader market and the trend of higher-highs and higher-lows suggests a positive investor bias.  Seasonally, the Philadelphia Semiconductor index tends to peak around the month of April, although the largest industry constituent, Intel (INTC), enters its period of seasonal strength just as the broader industry fades into the spring.  Shares of Intel were higher by 6.32%, ending at a fresh closing high.

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PHLX Semiconductor Seasonal Chart

$SOX Relative to the S&P 500
$SOX Relative to the S&P 500

$SOX Monthly Averages

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Intel Corporation (NASDAQ:INTC) Seasonality

INTC Relative to the S&P 500INTC Relative to the Sector

Monthly Seasonal Intel Corporation (NASDAQ:INTC)

The semiconductor surge pushed the technology sector to the top of the leaderboard during the day, allowing the S&P 500 Technology Sector Index to bounce for a second time around its 125-day moving average.  The pivotal 50-day moving average is directly overhead at 1175.  The sector has been under pressure in recent days as shares of Facebook falter amidst privacy concerns and the threat of regulation.  Facebook, the third largest constituent in the sector benchmark, traded lower by over 6% intraday, coming within points of fulfilling the downside target of a head-and-shoulders topping pattern that pointed to $147.  Shares of the tech titan closed higher on the day, charting a significant long-legged candlestick.  Horizontal resistance at the neckline of the bearish setup is apparent around $169.  The next period of seasonal strength for the technology sector is around the corner, running from mid-April through to Mid-July.

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Technology Sector Seasonal Chart

TECHNOLOGY Relative to the S&P 500
TECHNOLOGY Relative to the S&P 500

TECHNOLOGY Monthly Averages

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With technology in the green, the S&P 500 Index inevitably followed.  The benchmark bounced firmly from its 200-day moving average, suggesting a double-bottom low around 2585.  Follow-though to the upside in Tuesday’s session would help to confirm the significant support level below.  A number of hurdles remain on the upside, including gap resistance around 2700 and 2740.  The 50 and 100-day moving averages also hover around similar levels.  Going into the end of the month (and quarter), there is typically an upward bias to stocks as portfolio managers window-dress portfolios prior to reports going out to clients in the coming weeks.  First quarter earnings season in the month of April also has a positive influence as investors focus on upbeat guidance for the year ahead.  Fund inflows at the start of the quarter are also a benefit.

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Sentiment on Monday, as gauged by the put-call ratio, ended bearish at 1.18.

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Seasonal charts of companies reporting earnings today:

Aptose Biosciences, Inc. (APTO) Seasonal Chart FactSet Research Systems Inc. (FDS) Seasonal Chart Francesca's Holdings Corporation (FRAN) Seasonal Chart IHS Markit Ltd. (INFO) Seasonal Chart lululemon athletica inc. (LULU) Seasonal Chart McCormick & Company, Incorporated (MKC) Seasonal Chart Netlist, Inc. (NLST) Seasonal Chart Pareteum Corporation (TEUM) Seasonal Chart RH (RH) Seasonal Chart Shoe Carnival, Inc. (SCVL) Seasonal Chart Sonic Corp. (SONC) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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