Bonus swing trade ideas for stocks and futures – Happy 4th July!
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Market Narrative
In lieu of the holiday abbreviated trading week ahead of us, this newsletter will cover 2 weeks. Yesterday was the last trading day of the second quarter. We came into the week noting that there were few catalysts in the early part but several over the final two days. Now with those events behind us, and while those provided little to sway market drastically despite a widening of sector participation beyond just Info Tech. A similar theme repeats into July the initial couple of weeks in July [with the exception perhaps of the June jobs report due next Friday] with the markets lacking any notable catalysts to push much higher or lower. For the Emini S&P futures, the support level is 5508, below there for the upcoming holiday shortened trading week, we will be bearish and above there we could see us retest the poorly auctioned ETH high made during the week prior after the Juneteenth holiday of 5588. In the RTH yesterday and after the PCE and UoM consumer sentiment index, we moved as high at 5585 but failed to resolve and move above that ETH high. Customarily, a high made in the extended hours especially during an auction that was thinly participated, we find the market looking to resolve in the sessions that follow and while we came close, it did not happen. For the Emini S&P futures, the support level is 5508, below there for the upcoming holiday shortened trading week, we will be bearish and above there we could see us retest the poorly auctioned ETH high made during the week prior after the Juneteeth holiday of 5588. In the RTH yesterday and after the PCE and UoM consumer sentiment index, we moved as high at 5585 but failed to resolve and move above that ETH high. Customarily, a high made in the extended hours especially during an auction that was thinly participated, we find the market looking to resolve in the sessions that follow and while we came close, it did not happen.
Thursday’s GDP report failed to sway markets, as did the Friday’s Core PCE reading. The Fed’s preferred inflation gauge came in line within expectations and while the deflationary trends continue at the same pace, investors digested this outcome in line with an “as expected” sentiment. The UoM sentiment improved marginally, with inflation expectations pulling back, but those only caused reactionary trades which dropped right back where we left off on Thursday and analysts attribute this to widening sector rotation among other things also to end-of-month options trading activity and mid-year portfolio rebalancing by managed money. Nvidia appears to be flattening after moving nicely above 130 in the prior week and while this has contributed well to the move higher in the Nasdaq during the last two weeks, we may see a respite from this upward pressure in the week ahead. In fact, all the way thru mid-July, there aren’t meaningful catalysts that could likely contribute to a significant move higher in stocks. The market profile exhibited lack of interest above 5540 yesterday as value remained intact and wanting to hold above 5510 for the Emini S&P futures. The Nasdaq futures were about the same on the backs of sector rotation.
What we are looking at in terms of Futures and Stock trade ideas
Stocks [Covering only the Mag 8 – Q2 earnings begin in earnest only after July 15, 2024.
- META – Friday’s close above 504 which was support is suggestive of a move higher into and beyond 530.
- AAPL – continues to see support between 198~206, with a potential to take out the previous 220.20 high. If the Nasdaq pulls back ahead of Q2 earnings, expect AAPL to pullback as well but the 198.10 area to hold.
- AMZN – Went past the targets posted last week and made a 199.84 high. We pulled back into a decent support level now setting profit targets above 200.
- NFLX – into the reactionary trades which always coincide with earnings event and for the week beyond 7/12, any profit taking needs to hold 626~649.50. If we can hold this wide 20+ support price band, minimally expect 709 into earnings..
- GOOGL – Support is between 173~177.75 and if we can hold this price band, expect 190 as a target.
- MSFT – Fell sharply on Friday. Support is between 438~444.60. If we can hold this price level, expect 461.50 into the earnings period kickoff past July 15th
- NVDA – Profit taking here is the likely cause for a move lower in the Nasdaq on Friday and this could continue into the weeks leading into the Tech earnings kickoff. Support is between 99~115.3 so that is a wide price band for this actively traded stock. If we hold this price, expect 156~157 as a potential price target.
- TSLA – Tagging and moving well above las weeks profit targets to cap out at 203.20. While TSLA is trading a lot thinner than earlier quarters from a year ago, support is showing 182.50~190. If we hold this zone, look for 210 as an immediate profit target.
Futures
Category: Indices
- Emini S&P [ES]: After rolling to the September, we must hold 5386.50~5455.75 in that approximately 70-point wide support zone. If we hold this price zone on any liquidation in the upcoming two weeks, expect 5634 heading into the Q2 earnings.
- Emini Dow [YM]: Support is between 38680~39160 about 480-points wide. This very astute and “technical analysis” compliant index could see targets of 40400 if support holds.
- Emini Nasdaq: Weakness caused by sector rotation could drop us down to support levels which sits between 18673~19015 in a 342+ point window. If we are able to hold this region, expect 20755 as a potential target.
Category: Metals
- Silver: September Silver has a bearish outlook for the upcoming 2-3 weeks. Resistance is 30.465 and if that price holds expect the target to be 28.375~27.250.
- Gold: August Gold looks bullish above 2327.6 and has support between 2314.5~2311.2 with targets pointing to 2361.4.
- Platinum: October Platinum has support between 965.5~991.7 and despite the pullback this past Friday into settlement, we see profit targets of 1059.2 if the stated support price band can hold a potential slide lower in the upcoming weeks.
- Copper: With weakening economic activity across the globe sprinkled with political turmoil and continuing cross-border conflicts around different parts of the world, September copper moves on continued weakness bearing resistance between 4.432~4.4915 and while being oversold short-term, could see immediate profit targets down to 4.279.
Category: Treasury
- 30-Year Treasury futures [ZB] Bearish short-term owing to rising yields last week has us looking at support between 115’24~116’26. Holding this price band, with yields staying lower heading into the monthly jobs data next week could see us looking at 122’07 for immediate price targets.
- 10-Year Treasury futures [ZN] Similar bearishness on Friday owing to rising yields has us looking for support between 108’200~109’160. This region held the fall about 3 weeks ago after the CPI data therefore if it holds again, expect 111’240.
Category: Energy
- Heating Oil: August contract has support at 2.5190. If we hold support expect 2.6307 provided Crude Oil continues to be supportive with a continuation move higher.
- Gasoline: Has support between 2.427~2.456. If we hold this price band, expect 2.6035 with Crude prices holding the key for that price target to the upside.
- WTI Crude: Immediate support is 79.37. Below there is short-term bearish and above there price targets range from 82.72~84.87 into the September contract roll.
Category: Agri
- Oats: Oversold in the short-term has strong support at 306.50~311.50. If this price band can continue to contribute towards price support, expect 337.50.
- Wheat: Despite the pullback on Friday, 568 appears to have held. Immediate target is 593.25 if this 563~568 could be filed as having held initial support. Wheat is oversold short-term so a move higher has better probabilities.
Category: Forex/Currencies
- AUD/USD: 0.66200 is immediate support. If we can hold this into the jobs data, expect 0.67500.
- EUR/USD: 1.06785~1.06885 forms immediate support looking to tag 1.075 if this zone holds.
- USD/JPY: 159.275~159.700 is support, and if this holds expect 161.865~162.000 for price targets.
- GBP/USD: 1.26035 is the support point, looking to take out 1.286 if this support price line holds.
- USD/CHF: Has support between 0.88595~0.8912. If this price band holds, expect 0.90475.
On the date of publication, Murali Sarma did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.