Douglas Busch

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So far Douglas Busch has created 3105 blog entries.
27 May 2022

Industrial Sector Review: 5/31/22

By |2022-05-27T20:55:10-04:00Friday|

Defensive Aspirations: They say in sports defense wins championships. Well inside the industrials defense is best in breed and leading the way thus far in 2022. Below is the ratio chart of the ITA compared to the S&P 500 and it demonstrates its superiority. The ITA is down 6% YTD, while the XLI is 9% lower, and it is acting a tad bit better as it trades 9% from most recent 52-week highs and the XLI is 11% off its annual peak. The top holding in RTX just bounced off the very round 90 number which doubled as 200-day SMA support. The second-largest component in LMT Friday just broke above a double bottom pivot of 449.68. Both of these stocks gained ground every day last week. Now contrast that with the 3rd largest holding in BA which is still 49% off heights made last June. In April the stock advanced just 4 sessions. Others in the group that are lagging include KTOS, whose chart sports a bear flag. AXON has been holding the very round par number recently and has roughly traded between 100-200.

26 May 2022

Technology Sector Review: 5/27/22

By |2022-05-26T16:15:06-04:00Thursday|

Round Number Relevance: In our Tuesday Technology Note, we looked at the possibility that GOOGL was going to witness a bounce at the very round 2000 number. It was thrust into that area on the back of the ill-received earnings reaction from SNAP. At the moment that swoosh lower looks like it was an opportunity. Looking at the group as a whole via the major S&P sectors, technology is still firmly underperformed with the XLK down more than 20% YTD and just the ninth best of 11. But earnings reactions are starting to show resiliency, with SNOW and NVDA acting decently following Wednesday's aftermarket debacles. The SMH is higher by almost 4% this week thus far, which would be one of its best WEEKLY showings in 2022 so far. Below is the chart of the QQQ which is right back to the very round 300 figure, a level that was resistant in mid-2020, and support in early '21. Was the recent move below a bear trap from the 300-400 range? We will soon find out as it is right there at the CLOSE of trading Thursday.

24 May 2022

Technology Sector Review: 5/25/22

By |2022-05-24T16:13:53-04:00Tuesday|

Round Number Rescue: Monday afternoon witnessed an ill-received earnings report from SNAP which saw the stock Tuesday sliced by a more than a whopping 40%. This selling spilled over into "ad" peers, rightly or wrongly, although we know PRICE is always right and makes little sense to argue with it. Names like FB dropped 7% in sympathy with the stock filling in a gap from the 4/27 session, from earnings. TWTR, like FB, which is 50% off most recent 52-week highs slipped 5% as it looks to be breaking below a bear flag pattern, but the stock is in the middle of possible litigation of a Musk takeover. PINS gave up a quarter of its value alone Tuesday, and below is the chart of GOOGL. Perhaps this is the name that many feels were "undeservedly" brought down by the SNAP debacle. It is acting "better" than others spoken of in this paragraph now down 31% off most recent 52-week highs. I think this could be a good risk/reward situation on the long side as it trades toward the lower end of the range between the very round 2000-3000 figures. 

23 May 2022

Financial Sector Review: 5/24/22

By |2022-05-23T16:06:05-04:00Monday|

European Strength: PRICE divergences are often clues as to future direction. Within the financial arena, some of this is starting to show up in the European banks versus the domestic ones. In the last couple of weeks, the EUFN has risen by 1.1 and 1.9%, while the XLF has dropped by 3.5 and 1.8% respectively. It is a small sample size but one to monitor. Both ETFs are off by 19% from their most recent 52-week highs and over the last one-month period the EUFN has "outperformed" down 3%, while the XLF has dropped double that at 6%. One thing that can be aided EUFN's strength is the robust dividend yield of 4.7% compared to the XLF's 1.9%. Top holding HSBC if it can hold the round 30 number it puts a future double bottom pivot of 35.34 in focus. BNPQY has the look of a nice bullish ascending triangle with a break above 28 carrying a measured move to 34. Give credit to the US banks today as JPM rose more than 6% on the best daily volume in more than 6 weeks. I just think at the moment it makes sense to overweight the European finnies.

22 May 2022

The Week Ahead: Starting 5/23/22

By |2022-05-22T17:42:14-04:00Sunday|

The Week Ahead: Energy Rotation Underway? There are some circumstances when one looks back in retrospect that they see the light. Since we are on the theme of commodities I remember when the KOL stopped trading in December 2020, and since then coal stocks have soared overall. For example, CEIX was trading with a 5 handle when the ETF shut down and is now trading just above the very round 50 number, 10X higher. The tweet below that came out this week to me said this may be the top of the energy as BlackRock is about to embark on letting go of technology, which is at extremely depressed levels in favor of an energy group that has soared over the last couple years. We obviously will not know until well after the fact, but we may look back on this tweet as an aha moment.