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Market Commentary

Market Commentary: March 22, 2020

This issue looks at the top 15 stocks of the S&P 500, and a quick look at Bitcoin. With everyone’s eyes on COVID-19 and the market meltdown, I wanted to review the top 15 stocks in the S&P to assess what each company looks like from a technical standpoint, independently from one another. The goal of this review is to see which stocks are at or near bottom, and what risk looks like going forward. I took the stocks with a weighting of one percent and greater, with a combined weight of about 31% of the S&P 500.

Everyone has their eyes on COVID-19 and the market meltdown. I wanted to chart the top stocks in the S&P 500 to see what they look like individually. I took the stocks with a weighting of one percent and greater, with a combined weight of about 31% of the S&P 500.

Contents

StocksWeight of S&P
MSFT
AAPL
AMZN
FB
BRK.B
JNJ
GOOG
PG
JPM
V
T
VZ
UHG
MA
INTC
5.45%
5.11%
3.92%
1.84%
1.71%
1.67%
1.66%
1.38%
1.33%
1.30%
1.13%
1.11%
1.04%
1.009%
1.00%
BitcoinLast chart
Click the tickers below to expand charts*

Stocks

Microsoft

TickerSectorPrice
MSFTTechnology$137.35
This image has an empty alt attribute; its file name is msft_w.png

Microsoft is testing a major 10 year demand curve. The 100 week moving average has been relatively accurate in identifying lows in the trend. The current price action suggests a low is near in either time or price. I think it’s likely to bounce off this level. If not, it will be the first time Microsoft breaks the 10 year curve.


Apple

TickerSectorPrice
AAPLTechnology$229.24
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Apple shows a lot of support at the 185 – 190 level. I would be a buyer there, or anywhere near the 200 week moving average or 10 year demand line.


Amazon

TickerSectorPrice
AMZNE-Com/Tech$1845.09
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Amazon exhibits my favorite price action among the top 15 holdings in the S&P500. Price is currently in a 2 year upward channel supported by an 18 year demand curve.


Facebook

TickerSectorPrice
FBTechnology$149.73
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Facebook found support on the monthly chart which is positive. While it has the potential to breakdown, I think it will eventually morph into a bullish H&S pattern.


Berkshire Hathaway Class B

TickerSectorPrice
BRK.BConglomerate170.06
This image has an empty alt attribute; its file name is YbBhg8kV3Fn4CU7NvLruLBUEr_E-HSKNvuHANTS9A7Gw7DF7XaKZaZXJ0nz3QwthXorBTIcpHmEhwEy_pI0_BHyXfugs6o2fSKc6SOlNdFImT6cgurVSkRdsDrX5l_3nMBOMEaYb

Berkshire looks like it needs to get flushed down to the demand line. I’d be a major buyer there.


Johnson & Johnson

TickerSectorPrice
JNJConsumer Staples119.89
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This may be the bottom for JNJ… but it’s possible we see a breakdown toward the high 90s. Risk/reward here is worth taking a long position risking a *close* under current lows.


Google/Alphabet

TickerSectorPrice
GOOGLTechnology1068.71
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Google is now sitting at support. There is reasonable risk that this support will be broken and that would be very bearish. It would really interest me if Google could break the current support level and form a sharp V shaped reversal pattern. Again, this could be an interesting risk/reward set-up for longs at these levels.


Proctor & Gamble

TickerSectorPrice
PGConsumer Staples102.43
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Something I don’t like are sharp retests of structure from an advanced move like P&G. Markets that breakout from consolidation levels and reverse lower often find deeper support levels than their former breakout levels. P&G would be really intriguing if it falls to the major support level. That’s about 25% lower.


JP Morgan

TickerSectorPrice
JPMFinancial83.50
This image has an empty alt attribute; its file name is jpm_m.png

JPMorgan would be an attractive buy at around $45 per share. That would be a retest into a near 20 year consolidation, Trump’s election, and its 300 month moving average. That’s also about 25% lower.


Visa

TickerSectorPrice
VFinancial Services146.83
This image has an empty alt attribute; its file name is visa_w.png

Visa is testing an 11 year demand curve. We are seeing these a lot – companies that are coming close to their demand curves in the S&P. Breakdown or bottom? Are we in for major breakdowns across the board, or are we at the bottom? Time will tell.


Intel

TickerSectorPrice
INTCSemiconductor Manufacturing45.82
This image has an empty alt attribute; its file name is intel.png

Intel is sitting at a 2 year support. This chart looks similar to Google. Another example of a pivotal level where we have to ask if it’s the bottom or the cusp of a breakdown.


Mastercard

TickerSectorPrice
MAFinancial Services211.42
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Mastercard broke below an 11 year demand curve this week, while Visa is on the edge of breaking its own. The global lockdown can’t be good for credit card debt… Right? This is one of the few charts that signal breakdown rather than bottom. The question is whether it morphs into a new pattern. Major blue chips or assets that “breakdown” usually form into different structures.


UnitedHealth Group

TickerSectorPrice
UNHHealthcare206.59
This image has an empty alt attribute; its file name is unh.png

This chart is VERY bearish if it closes below its support this week.


Verizon

TickerSectorPrice
VZTelecom51.80
This image has an empty alt attribute; its file name is verizon.png

Verizon looks like it’s unlikely to make new highs anytime soon, so I could only guess what happens next…


AT&T

TickerSectorPrice
TTelecom28.45
This image has an empty alt attribute; its file name is atnt.png

There’s a lot of support here. We could see a breakdown if it doesn’t hold.


S&P 500

TickerSectorPrice
SPX500US Index2297.6
This image has an empty alt attribute; its file name is spx_now.png

The next stop for the S&P could be a retest of the 2016 winning election breakout level, somewhere around 2070 – about 10% below its current level. I think there is substantial risk for a decline beyond 10% this year.


Cryptocurrencies

Bitcoin

CryptoPrice
BTCUSD5417.10 (BLX)
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Bitcoin may have experienced capitulation last week, hitting about 3800 USD – this is bullish. For now, this is just one possible chart construction for Bitcoin. If recent lows are taken out, we’ll have a very different picture.


Stay aware. Stay organized.

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