Considerable selloff in oil yesterday, tried to research & understand just how integral oil is to the economy and what it means for stocks. Looks like, in part because of the drop in oil, a few sectors ran & look poised to continue running, but beware consolidation. consumer staples looking like it may continue run, , healthcare looking reasonably promising, industrials & tech as well. /ES seems to be forming falling wedge, do not neglect this.
Communication Services
- DIS | Looks promising, hovering above meaningful daily level in premarket after really on decent volume yesterday.
Consumer Discretionary
- Multiple names approaching significant daily resistance after strong runs on slightly larger than average volume. With oil forming pennant, possibility of continued downside on oil (which is direction of previous move before pennant) could result in more upside on these names, though market itself looks to be in considerable consolidation
- NKE | Approaching daily level, did not close above
- MCD | Solid close on daily, but still underneath considerable, historical level of supply. no clear moves, but watch oil.
- HD | Approaching key 284 resistance, but should this be overcome, considerable room to run, with wicks and then gap above 287. Worth keeping an eye on.
- AMZN | Poised to continue
Consumer Staples
- COST | Multiple tests of 490, but consistent rejection. potential for upside if this level is breached, but exercise caution
- WMT | Similar to COST but with 124.5 level.
Energy
- After shellacking yesterday, continuation possible, but oil holding at 100 currently. Consolidation could continue, exercise caution.
- XOM | Opening below 85 level, good area to trade around, though which direction will take is unclear. strong demand pushed price back up from lows yesterday, treacherous to commit to either direction, watch oil for insight.
- CVX | Same as XOM , opening below key 142.5 level.
Healthcare
- PFE | Looks promising in premarket, demand lead to massive wick candle, seems demand could continue, small gap from 51.75 to 52.25. This is a name 40 shares could be justified.
- LLY | Could be promising if price holds above 327. Keep tight stops & trade 10 shares if price action holds.
Industrials
- BA | Approaching gap above 138. Look for fill on this of oil remains weak & market moves.
This may be a no trade day, and I might be cautioned not to touch anything. There is potential for some movement in names I’ve outlined but there are no setups that are presenting themselves with abundant clarity, other than some of the gap fills. Exercise caution & give the market time at the open to hopefully grind out of it’s consolidation.