Stocks in Focus
1/ Tesla (TSLA)
2/ IBM
3/ UPS
Investopedia is partnering with CMT Association on this newsletter. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.
1/ Tesla (TSLA)
Tesla (TSLA) traded lower after 6 of its last 8 reports. The average price swing is +/-7.3%. It continues to be the one stock in the Magnificent 7 that has failed to ever recapture its all-time highs and remains 47% off those levels. Shares are lower on the year by 11%.
We have discussed ad nauseum about the company’s disappointments here in the past – the delayed and higher priced Cyber Truck roll out and now the over hyped and under delivered metrics behind autonomous driving and the Robotaxi. The stock has been trading on more real numbers and results than anticipation of the next big thing.
So let’s focus on the technicals. It broke a long term downtrend that went back to its November 2021 peak at just over $400 a share in July. Now the range in price is narrowing with a slightly bullish bias.
This could be the quarter where the recent neutral trend changes and it tries to be magnificent again. Given the volatility, bulls want to see shares eclipse and stay above recent highs at $265. This would be the green light that its worst performance may be in the rearview mirror.
The bear case would see price action falter below the 200-day moving average and shares trend back to recent lows around $182. Either way, traders need to buckle up. Despite a rather flat year, the price swings still make this one of the favorite stocks for the day and swing traders.
2/ IBM
Remember good old Big Blue? It was once the most active and biggest tech stock in the world, but now is just a forgotten relic by most. Not by us though.
Did you know that Big Blue is up a whopping 42% year-to-date? It’s up 66% over the last 52-weeks and trading at all-time highs. People have been sleeping on the former giant and still think of them as just a main frame company.
Yet over the last 10 years they have acquired over 50 companies to improve cloud, cybersecurity and their software network. They have positioned themselves to compete in the mighty tech landscape and thrive. Clearly recent results agree.
This Wednesday they report earnings and look to add on to their silent rally. Shares have traded higher after five of their last six results, but technically have become quite overbought.
The above chart is a 10-year weekly showing the stratospheric move over the last year. It may take a significant beat and guide to keep that momentum going. One thing is clear, Big Blue is back.
3/ UPS
UPS has been mired in a two-year downtrend and hopefully this quarterly report is what finally changes that narrative.
They faced headwinds with labor negotiations early in the year and shipping volumes have softened year-over-year. It didn’t help that their biggest competitor in FedEx (FDX) cited similar struggles when they reported weeks ago.
Technically watch the 200-day moving average. That has acted as major resistance consistently over this time period. Shares continue to make lower highs on each rally. That is the standard definition of a textbook downtrend which UPS clearly is experiencing.
Watch the August lows around $124 to see if they hold if there is a negative reaction. Not creating a new low may be a little win for shareholders if tough times continue. A break above the 200-day and we may finally be discussing the start of a prolonged upswing.
About this week’s author:
Jay Woods, CMT is the Chief Global Strategist for Freedom Capital Markets. Jay spent over 25 years as a Designated Market Maker on the NYSE floor. He started with Spear, Leeds, and Kellogg, then joined Goldman Sachs for 14 years and moved on to IMC after Goldman divested their floor operation. As a DMM, he was responsible for several high-profile IPOs and led trading in some of the most active issues at the NYSE.
————————————————-
Originally posted on October 22nd, 2024
Disclosure: Investopedia
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
