Equity Clock

Stock Market Outlook for July 27, 2020

The Technology sector benchmark has closed below its rising 20-day moving average for the first time since the start of April.

 

 

 

*** 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:

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Newell Brands Inc. (NASD:NWL) Seasonal Chart

Tetra Tech Inc. (NASD:TTEK) Seasonal Chart

FutureFuel Corp. (NYSE:FF) Seasonal Chart

iShares Global Monthly Dividend Index ETF (CAD-Hedged) (TSE:CYH.TO) Seasonal Chart

iShares Canadian Financial Monthly Income ETF (TSE:FIE.TO) Seasonal Chart

iShares Core S&P-TSX Composite High Dividend Index ETF (TSE:XEI.TO) Seasonal Chart

iShares Floating Rate Index ETF (TSE:XFR.TO) Seasonal Chart

VanEck Vectors International High Yield Bond ETF (AMEX:IHY) Seasonal Chart

Parkland Fuel Corp. (TSE:PKI.TO) Seasonal Chart

TELUS Corp. (TSE:T.TO) Seasonal Chart

C.H. Robinson Worldwide, Inc. (NASD:CHRW) Seasonal Chart

Crown Castle Intl Corp. (NYSE:CCI) Seasonal Chart

Corelogic Inc. (NYSE:CLGX) Seasonal Chart

 

 

The Markets

Stocks dipped to close the final trading day of the week as investors reacted to the ongoing rotation away from the technology sector, along with escalating US-China tensions.  The S&P 500 Index shed just over six-tenths of one percent, charting a second consecutive down day.  The last back-to-back set of declining sessions was realized following the June peak that resulted in  drawdown of around 8% from peak to trough.  So far, the large-cap benchmark is approximately 1.9% off the recent peak charted on Wednesday.  Support at rising 20 and 50-day moving averages are not far off at 3175 and 3104, respectively.  Momentum indicators continue to roll over and a sell signal with MACD still appears imminent.  The upward momentum in this market has waned and a period of consolidation may be required before taking another swing at significant overhead resistance between 3250 and 3325.

The deterioration of the large-cap benchmark is being driven by the rollover of momentum in the technology sector as the outperforming trend in the sector starts to fade.  On Friday, the S&P 500 Technology Sector Index closed below its rising 20-day moving average for the first time since the start of April.  A shift of the short-term trend from higher-highs and higher-lows is being implied.  Momentum indicators on the technology benchmark had been negatively diverging from price prior to this past week’s pullback, hinting of waning buying demand.  So far, the rotation in the equity market appears quite normal and healthy, but during this volatile time of year for stocks, we must remain on our toes.  We continue to maintain our “Accumulate” rating for technology sector constituents, but some digestion would not only be healthy, but also required to entice further buyers into the market.

Soon to be released…

We are busy preparing our monthly outlook for August, containing all of the goodies that you’ve come to expect of our monthly reports.  Subscribers can look for this report in their inbox in the week ahead.

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Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.91.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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