One Sector Ripping to the Upside

Good morning! And welcome to today’s Rude Awakening

The market opened to the positive, but we’ve now slipped a bit to the negative on the S&P, still sitting right at that 50day MA.

Interesting day yesterday, as the market continued to slide to the downside, we saw another red candlestick for the day.

Coronavirus Cases Up 20% from Last Week

It’s news we never hoped to see again…

We’re reaching new highs in covid cases.

Countries like France are now looking to reenter a full lockdown.

This uptick in infection rates is definitely playing a role in this newly invigorated downtrend.

As you know, markets hate chaos. As long as covid persists and cases climb, we’ll see this continued selloff.

So, what are we watching, and see a lot of activity?

Let’s talk about today’s watchlist…

1 Bearish + 2 Bullish Plays Today

The number one stock I’m looking at right now is in a sector I talked about recently, one that’s benefitted massively from the social distance mandates… recreation.

The stock I’m watching is Harley-Davidson, Inc. (NYSE: HOG) which is spiking to the upside.

They’ve just reported their best Q3 results since 2015!

Recreational vehicle companies are absolutely killing it in this marketplace.

Bank stocks are also looking strong. One in particular to watch is HSBC Holdings plc (NYSE: HSBC), which is popping to the upside today after reporting some nice earnings. HSBC’s results are pulling the rest of the sector up with it, pulling above their 50day MA, switching from the down to the uptrend.

This could be a bullish indicator for the stock and the overall sector.

And on the bearish side…

DexCom, Inc. (NASDAQ: DXCM), a company that makes supplies for the treatment of diabetes, is one to watch. Rick Doubleday, their former Exec. VP & Chief Commercial Officer, retired from the company. And they’ve pre-announced their Q3 revenue, which came in just a little light…

This has pushed the company down below its 50day MA — down over 20 bucks on the day, or more than 5%.

We are now decidedly red on the S&P, and the NASDAQ is giving back a lot of gains…

Once again, we are seeing sell signals across the board on all our major indicators: Stochastics, RSI, MACD and histogram, all weak and pointing down.

Trade volume and volatility are also low.

I’ll remind you: This is usually a precursor to a big move taking place…

So, we’ll have to continue to keep a close eye on these indicators to see where markets are headed next.

Have a safe trading day folks.

We’ll talk tomorrow.

Regards,

Scott Stewart

Scott Stewart
Editor, Rude Awakening

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Scott Stewart

Scott Stewart has been trading for decades. He has acted as an analyst and educator on the stock market for just as long. As your Rich Dad's Weekly Cash Flow analyst, Scott works tirelessly to ensure you know everything you need to do when entering into new positions, and adjusting trades as you go along....

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