Free

Black Gold Push? As the XLE looks to build on some momentum from the recent election, as the president-elect should be a friendlier administration to the group, it pays to look for opportunities within. The daily chart of the XLE does trade a bit wide and loose for my liking, but notice on the ratio chart how since the start of November is pushing gently ABOVE a bearish head and shoulders pattern against the S&P 500 and we know from FALSE moves often come fast ones in the opposite direction. It will likely feel a magnetic pull toward the very round 100 number into year-end as it is now showing a base-on-base pattern with back-to-back double bottoms. A major player in the fund that will have an enormous impact on it is the daily chart below of CVX. It is now above a bull flag but may feel some pressure with the second straight spinning top candle today and bearish engulfing candle last Wednesday. I think it makes sense to buy a pullback into the latest gap-up from the 11/6 session. If one zooms out and looks at the MONTHLY chart, they would see some solid overall digestion since the last couple of years, after a big 2021 run. On the MONTHLY ratio chart, it has lagged XOM for almost 4 years now the exact opposite of the 2016-2021 time frame. Time for some outperformance against its giant rival in 2025?

Irresponsible Comparison: Last week I did hear some mention regarding some semiconductor names REPORTING earnings. The main story was if AMD can not record a solid earnings reaction then how in the world will INTC. Well, we all know how that worked out. While many were anticipating a nice move for AMD it slumped 11% on 10/30, while INTC jumped 8% on 11/1 (we looked at that name in our Monday Tech note here). This week we will see how LYFT works out, but I am hearing similar things, as if UBER flounders like it did losing 9% on 10/31, Lyft surely will decline. Be careful with that comparison. Below is how we looked at LYFT in our 10/25 Technology Note and it will be interesting to see how it responds this Wednesday after the CLOSE. Stock Needs a "Lyft": In the ride-sharing space, there are just two names that dominate the conversation. UBER gets the vast majority of chatter and that name is now filling a gap from the 10/10 session and is a quick 10% off from the 52-week highs made on 10/11 after the TSLA Robotaxi event. Perhaps the strength with TSLA earnings was the reason behind its softness early on Thursday. The other side of the theme here is the daily chart below of LYFT. It has carved out a bullish inverse head and shoulders pattern just below the 200-day SMA and on its MONTHLY chart it has been trading between the rough ranges of the round 10-20 numbers since plunging below 20 in May 2022. There was a bearish shooting star and engulfing candles at 20 in August 2022 and this April, and bullish engulfing candle and hammer in November 2023 and August respectively. JPM owns 6.5% of the shares outstanding reported earlier this year and it was David Teppers top buy in Q2. This one can have room to run if it breaks above 14.25. 

Could It be Time to Add Intel to Your Portfolio? There is a rich history of stocks being deleted from the Dow which tend to outperform the name that replaced them. Will history repeat itself with INTC and NVDA with the big announcement after the CLOSE Friday? I am not here to suggest NVDA will be outshined by INTC over the next 12 months, rather to encourage one to look at the semi laggard in a positive light. Perhaps a barbell approach owning both. The MONTHLY chart below of INTC has a nice look if it can hold the very round 20 number. Both August and September traded with an 18 handle only to CLOSE with a 22 and 23 handle respectively, showing investors showed up at the level enthusiastically. Friday Intel recorded a nice earnings reaction up 8%, its first gain in its last 3 reports (the previous three slumped 26, 9, and 12%) and the DAILY chart here shows a logical move toward the upside gap fill at 29 from the 8/1 session. The WEEKLY chart still has plenty of repair to do but notice the big accumulation in September with the 3 weeks ending between 9/13-27 rising by a combined 25% in huge volume (the last 2 weeks of that streak were the heaviest WEEKLY volume in the last 5 years). The doji candle in October suggests overall selling pressure is abating too. Enter INTC at 22 and use a CLOSING stop of 19.75.

For long-term investors, the old adage "buy low and sell high" does not always apply. Often they will buy high and sell higher. What this means is that the best stocks often offer add-on buy points on the way UP. As we await the earnings from TSLA after the CLOSE Wednesday afternoon GM already did so and it was impressive. Below is how we looked at the name in our 8/19 Consumer Note. General Motors: Auto play up 26% YTD and 38% over last one year period. Dividend yield of 1.1%. Name 10% off most recent 52-week highs (rival F is 29% off its annual peak in comparison) and WEEKLY chart shows rapid reclaim of 200 WEEK SMA which was stern resistance throughout 2022-23. Nice action last week up 4.2% following through after prior weeks bullish piercing line candle off 50 WEEK SMA. Earnings reactions mixed up 4.4 and 7.8% on 4/23 and 1/30 and fell 6.4 and 2.2% on 7/23 and 10/24/23. Enter into gap fill which completed bullish island reversal. Entry GM 44.25.  Stop 42.50.

Stay Openminded: Looking at the WEEKLY returns last week the two best performers were from defensive groups, in the utilities and real estate, which each screamed higher by more than 3%. Of course, that is a small sample size but after the move that technology has seen from the early August lows is there a pullback in store? PRICE action could be potentially hitting a double top with the early July time-period and some dubious candles were recorded last week. Thursday was more suspicious with the bearish filled-in black candle, and the prior example 9/26 witnessed a quick 600 handle drop before the uptrend resumed. We are also trading into the bearish engulfing candle from 7/11 which started a rapid 16% decline from top to the bottom of the range to the 8/5 intraday lows. A move below the 18250 bearish rising wedge pattern would carry a measured move to 16200. I remain bullish overall and I think that possibility is remote but something one must be cognizant of. Keep in mind on the Nasdaq WEEKLY chart we are trading into the bearish evening star pattern (doji candle in the middle), and on the MONTHLY chart we are so far negating the August doji candle which had a 3000 handle range, and that was after the huge move off the very round 10000 figure to start 2023.