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: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.