The S&P 500 Rallies To a New Record High After Joe Biden Declares Victory
Jason Lubin November 9, 2020 4:25 PM
Big earnings releases this week include DHI, APD, DIS and CSCO.
On Tuesday, D.R. Horton (DHI) is anticipated to release fourth quarter EPS of $1.76 vs $1.35 last year on revenue of $5.8 billion compared to $5.0 billion a year ago. The Co builds and sells single-family detached homes, and on October 19th, the Co announced the acquisition of Braselton Homes, the largest homebuilder in Corpus Christi, Texas, for approximately 23.0 million dollars. Looking at a daily chart, the RSI is below its neutrality area at 50. The MACD is below its signal line and negative. The configuration is negative. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at $73.03 and $73.15). We are looking at the final target of $61.30 with a stop-loss set at $76.80.
On Wednesday, Air Products & Chemicals (APD) is expected to announce fourth quarter EPS of $2.17 compared to $2.27 a year ago on revenue of $2.3 billion, in line with the year before. The Co is one of the leading industrial gas suppliers globally and its current analyst consensus rating is 15 buys, 12 holds and 0 sells, according to Bloomberg. From a technical point of view, the RSI is above its neutrality area at 50. The MACD is above its signal line and negative. The MACD must break above its zero level to call for further upside. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $291.7 and $294.55). We are looking at the final target of $331.00 with a stop-loss set at $292.00.
On Thursday, Walt Disney (DIS) is likely to unveil fourth quarter LPS of $0.72 vs an EPS of $1.07 last year on revenue of $14.2 billion compared to 19.1 billion a year ago. The Co is an entertainment and media giant, and on October 29th, Vice President of Employee Relations, Jim Bowden, sent out a notice that 11,350 union employees of Walt Disney Parks and Resorts U.S. will be laid off on December 31st, 2020, due to business impacts from the Covid-19 pandemic. From a chartist's point of view, the RSI is above its neutrality area at 50. The MACD is negative and above its signal line. The MACD must break above its zero level to call for further upside. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $124.93 and $126.9). We are looking at the final target of $137.60 with a stop-loss set at $120.30.
Also on Thursday, Cisco Systems (CSCO) is awaited to post first quarter EPS of $0.71 compared to $0.84 a year ago on revenue of $11.9 billion vs $13.2 billion last year. The Co is a leading global supplier of network hardware and software, and on November 3rd, Ambow Education Holding (AMBO), a national provider of educational and career enhancement services in China, entered into a partnership with the Co to launch international career education, training and certification services for information technology (IT) and the Internet. Technically speaking, the RSI is below its neutrality area at 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at $38.05 and $38.96). We are looking at the final target of $39.90 with a stop-loss set at $36.00.
Looking at the S&P 500 CFD on a 30 minute chart, the index made a new record high of 3,673.90 on the morning of Monday, November 9th. Over the weekend, Democratic Presidential nominee Joe Biden declared victory in the 2020 Presidential election. Now that the election appears to have come to an end, the market is now expected to enter a new Presidential Cycle. The index will likely continue to advance making new highs along the way. If the index can get above its new all-time high of roughly 3,674.00, its next two Fibonacci targets are at 3,794.00 and 3,856.00. If the index slips, traders should look to 3,529.00 for a bounce. If price cannot hold at 3,529.00, then speculators should look for support at 3,463.00. If price does not rebound off of 3,463.00 it would be a bearish signal, as price would likely be below its 200-period simple moving average.
Source: GAIN Capital, TradingView
Disclaimer: GAIN Capital UK Limited (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by Forex.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
For further details see our full non-independent research disclaimer and quarterly summary.