Good morning, everyone, and welcome back. It is Stephen Whiteside here from theuptrend.com for Tuesday, May 28, 2024. In the pre market this morning, stock index futures are mixed. Dow futures are lower, while the S&P 500 and Nasdaq futures are slightly higher this morning. Commodities are also trading up. So that could help the TSX on Tuesday morning. Now, us markets were closed yesterday. Canadian markets were open, but very thinly traded. A lot of people in the financial world take the long weekend and it’s an unofficial golfing day, really. We’ll take a look at some of the volumes in a minute or two. We’re going to look at the magnificent seven stocks plus shopify today just to get a handle on what they’re doing. The Vix had an inside day on Friday. Things would change on Tuesday if the VIX closed above 13.14. Now, the Dow had a huge down day on Thursday, didn’t make much headway at all on Friday, closing slightly lower on the day. So no change there. It was Boeing that took the Dow down on Thursday, recovered a little bit on Friday. Then looking at the S&P 500, still on a buy signal here.
Inside day on Friday, similar situation for the Nasdaq 100 and for the semiconductors. Then looking at the canadian market, the ishares for the TSX 60 ended Thursday on a sell signal. Came back a little on Friday. Having an inside day was up slightly yesterday, but yesterday was an extremely thinly traded day. The average volume for this ETF is a little over 2 million shares. Yesterday it was less than 500,000. So dramatic drop in volume yesterday, not the type of day you really want to take action on. Similar situation for the Royal Bank, for example, it traded down into the channel on Friday, but recovered, closing higher on the day. Average volume for this stock is over 4.5 million shares. Yesterday was a little over 500,000. Yep, the market was open yesterday. But do I want to react to anything that happened on Monday? Not at all. And so that’s why we don’t even print the charts for a day like yesterday. Now moving on to the Magnificent 8. And of course, it’s the Magnificent Seven plus Shopify. Looking at the ETF, it made a new closing high on Friday. It’s going to be trading up this morning.
We’ve got some of the stocks in, in this list trading higher in the pre market inside day for Alphabet on Friday, a close on Tuesday below $171.71 would give us a sell signal. No joy for Amazon. Still on a sell signal here. That would change on Tuesday with a close above $185.86. Next up, we’re looking at Apple. And Apple drove right down to the lower channel line on Thursday, closing I believe one penny above the lower channel line. And on Friday we had an inside day looking for a close below 187.23 on Tuesday to give us a sell signal. Now in the premarket this morning, Apple is currently trading up at the 193.75 level. It’s traded a little above it, so if you had an order in up there, it’s probably going to get filled at the open. Our next mathematical target is $200, but we know that previously we got up as high as $199.62. If you still have Apple shares left, you probably want to put an order in just below the 199.62 level. Looking at Meta, we’re still treading water here, but still on a buy signal. Things would change on Tuesday with a close below $464.65. If we can get up above the top of that open gap, then $500 is certainly a legitimate target.
And then above that, 531.25 is also a legitimate target to the upside then looking at Microsoft. And remember, we’re looking for low risk opportunities where the stock is down at the bottom of the Panic Zone. So most of the sellers have probably left the building. And then we have enough downward momentum to give us a pressure zone. And when that happens, we look for momentum to change the chart to turn color. And here we are, we’re up at the top of the Panic Zones, currently ranked at ten. Early warning signal yeah, we can move higher from here, but you know, putting new money in here is high risk. Of course, you can always look for a couple of things. First of all, if you put in new money here, you have to be willing to get out on a close below the lower channel line. And of course, the first sign something new is happening is going to be the first close below the previous day’s low. If you look back here and we follow up, you’ll notice that we did not close below the previous day’s low. We closed at the previous day’s low there, but not below it.
And there’s another situation where we closed at the previous day’s low. So that’s one of the first things I look for as a sign of a possible change in momentum and a probable change in trend. So on Tuesday morning, we’re looking at Microsoft and we’re looking for a close below $419.12 to give us a sell signal. Our next target on the daily chart is $437.50. And our next target on the weekly chart is also 437.50. Then looking at Nvidia. Nvidia is trading higher in the pre market this morning. Remember, all this started when we were down at the bottom of Panic Zones. a Pressure Zone was forming. The chart started to turn color. Back then we were looking to see if the Flypaper would hold as support. Remember, when you’re trading below the Flypaper channel, it should act as resistance when you’re trading above it. The market should want to buy the dips if it’s still in a bullish mode. If the market still loves the stock, they’re going to be buying the dips off the Flypaper channel. And if we go back a month to April 22, we were down at the Flypaper channel. And then that’s how things turned out.
So always looking to watch the best stocks and buy them on the dip. And of course, the underperforming stocks are going to be under the Flypaper channel and looking at the Flypaper channel as possible resistance. So we’re up this morning in the pre market. Our next mathematical target on the daily chart is now 1125. That is also our next target on the weekly chart. Then looking at Shopify. Shopify is pretty ugly looking chart. We peaked back here in February, made a lower high, lower high. We made a low, lower low. And what do you know, we’re now making a lower low. So it’s an ugly looking stock, but it is very oversold. We’re at the bottom of the Panic Zones, a Pressure Zone has formed. So I would take a buy signal if it came up now. It did trade yesterday, but again, when you look at the volumes, you know, we were missing 2 million shares yesterday on the TSX, so really don’t care what happened yesterday. We’re trying to get down to $75 down at the bottom there. But there is a potential area of support at the 76.50 level, which is the top of the open gap from last fall.
So that may be acting as support if we look up on the TSX. We’re looking for a close on Tuesday above 83.20. In New York, it’s currently trading up twenty five cents. And so there, we’re looking for a close above $60.52. So not expecting a buy signal on Tuesday, but if one showed up, I would certainly be willing to take it. You can see it’s going to be a rough move to the upside. We’ve got that open gap there. And so the bottom of that open gap may act as resistance on the way back up last up this morning, we’re looking at Tesla. And Tesla popped last week and then pulled back into the channel. It’s still on a buy signal here. Things would change on Tuesday if we closed below $173.62. Now, if we look at what’s going on, the pros going into the long weekend gave up control, so that’s not a good sign. If we look at our price target chart, you can see we’ve been trading between these two price targets the past couple of weeks. For the past few months we’ve been in this range here and we’re currently above the halfway mark.
So we’re really looking for a move out above 187.50 to tell us that we want to go back up to the 203.13 level with possible resistance at 200. And you can see, unfortunately, the 200 day moving average held us in check recently and now it’s the 100 day moving average and we’re clustering around the 50 day moving average. And of course the Flypaper channel is acting as resistant, so it would be very bullish if we could break out above the Flypaper channel. We are coming into Tuesday on a buy signal that has not changed, but it is looking like a very, very weak buy signal. Ok, folks, that is all for this morning’s presentation. Have a great day. Next time you’ll hear my voice is on Wednesday morning. And at that time we’ll take a more broader look at the north american stock markets.
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Stephen Whiteside
TheUpTrend.com
Tuesday, May 28, 2024
