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Technology Sector Review: 4/3/23
Google It: We are in a bull market, at least for technology. On a YTD basis, the XLK is the best-performing major S&P sector up 21%, right in line with communication services. After that to round out the top 3 is discretionary, a nice combination of growth-like groups. And we hear all the chatter as to have the mega caps are responsible for all of the S&P 500's gains this year in the first quarter. More participation is needed, but perhaps it is giving some time for those that have not contributed a chance to play catch up. In the meantime stick with what is working and as always implement sound risk management. Below is the chart of GOOGL and round number theory is coming into play (has now recorded 3 WEEKLY consecutive CLOSES above par in 2 years), with the stock looking more comfortable above the par figure, an area of prior concern. It surged above the number on 2/2 but remained above it for only for 3 more sessions. This time around it feels more "relaxed" above 100 with 12 consecutive CLOSES above it. Keep it simple, and a nice cup with handle base is setting up here and one can open up a position here (use a stop below 97) and add to above the 106.69 pivot.
Technology Sector Review: 3/31/23
Blast From The Past Could Be Ready: We are well aware that the semiconductors have done the bulk of the heavy lifting within technology in the first quarter of 2023. Some have participated more than others, and of course NVDA there must be given an honorable mention up nearly double this year so far. AMD is trying to stay in the same sentence and has acted well POST breakout above a cup base pivot of on 89.04 taken out on 3/15. Not surprisingly it is meeting some difficulty at the very round par number here. On the other end of the spectrum laggards which are in the red YTD include WOLF TSEM and AMBA. Below is the WEEKLY chart of MU which is showing some signs of life here, but it should gravitate toward the very familiar 65 level in the near term (the ascending triangle can also be looked at as a complex inverse head and shoulders). On its daily chart, it is just above a double bottom with handle breakout pivot of 61.88 from 3/29. Will the 64 area become a triple top from last November and this January?
Consumer Discretionary Review: 3/30/23
Wheres The Beef? I am old enough to remember the brilliant commercials from the late Dave Thomas. One of the best perhaps was the slogan, "Wheres The Beef"? It was in reference to the burger wars that went on between MCD and BKC, the latter before the merger with Tim Hortons. Currently, MCD looks appetizing, pun intended, as it trades between a taut range between 260-280, and on its WEEKLY chart has the look of a cup base pivot just below 282, and a breakout would carry a measured move to the very round 300 number. It trades just 2% off most recent 52-week highs, while the chart below of WEN is 11% off its own annual peak, but looks good on both a WEEKLY and daily time frame. That slight weakness translates into a nice dividend yield of 4.7%, double that of MCD. Below is the daily chart of Wendys and the WEEKLY chart has the look of potentially building the right clavicle in a bullish inverse head and shoulders pattern. A move above a 24.50 trigger would carry a measured move to 32. And on top of that one has the Peltz put, although he did mention in January he is not interested in acquiring the name.