There are always two sides to every story, and in trading it is the bull and bear case. Each bias can be backed up by ones own thought process, but the only side that is correct in investing is PRICE. Below is the chart of the Nasdaq, and bulls can declare the index is not shying away from its 50 day SMA like it did last month, and that a double bottom formation is taking shape. Until that double bottom is taken out bears can state three lower lows, and that it is taking too much time to hurdle back above the 50 day SMA. Both narratives have their merit, but it will be PRICE action that determines the winner. The bears still have the burden of proof, as the markets have been robust for quite some time, but the bulls need to start proving their theory is worthy, by not wasting much more time.
Success Attracts Attention:
In the world of payment plays, the room is getting crowded. When achievements are made, competitors begin circling. Perhaps it is an act of flattery being the best form of imitation, and knowing it can be done. The pioneers that began the journey will have a head start, but newcomers will often be flush with cash and talent. Below we take a look at the ratio chart comparing SQ:PYPL, and while the former has been lagging its main rival, now 28% off most recent 52 week highs (PYPL trades right at all time highs), it is beginning to act better. Will it last? No one knows, but it seems like the names are abundant such as GPN PAGS and WP to name a few. Perhaps there is room for several players to flourish. Pay attention most to the ones acting well from a PRICE standpoint.
We always like to mention that the best stocks will often give you a chance to buy on the way UP. Below is a good example of that with the chart of MSFT, and how it was profiled in our 6/3 Technology Report. This is probably one of the best in breed “old tech” names, and its inclusion in the software group does not hurt. This leader recently broke above a double bottom pivot of 130.56 on 6/7, and has now set up a bull flag formation. A break above 134 can be added to yet again, and would contain a measured move to 149.