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.
|Stocks||Weight of S&P|
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 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 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 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
Berkshire looks like it needs to get flushed down to the demand line. I’d be a major buyer there.
Johnson & Johnson
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 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
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.
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 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 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 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.
This chart is VERY bearish if it closes below its support this week.
Verizon looks like it’s unlikely to make new highs anytime soon, so I could only guess what happens next…
There’s a lot of support here. We could see a breakdown if it doesn’t hold.
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.
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.
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