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Swing Trade Ideas – May 27, 2020

Market View

USA equity futures gapped up in the overnight session with SPY reaching 303.86. European stocks are strong following the announcement of a $800B assistance package. Chinese markets are down perhaps due to USA trade and or Hong Kong issues. Yield curve is steeper, commodities are softer, oil is lower and USD is lower so a mixed backdrop for equities.  USA equities are again being led by small caps, financials, industrials and beaten down travel and entertainment stocks. The technology heavy Nasdaq index is lagging and one should watch the performance of the FAANGM stocks if trading the S&P500.  SPY levels:  302 Tues high; 299 Tues low; 299.38 bottom of Tues gap. May see some short covering at the open after the poor close Tues.

Premarket names:

STNE earnings; RY, BMO earnings; CCL NCHL SAVE AAL travel; DKNG sports starting up;   PZZA pizza sales good ; Casinos, Airlines, Insurance, Banks, Smallcaps.

Stock Idea: KO Long

Coca Cola is an iconic name that has underperformed along with the staples sector. The virus shutdown has hurt KO which sells to  restaurants and consumers. One can see that there is a large volume by price gap above that can allow a large move should KO break out. There is short term resistance at 48 and 50. Thinking of this as a longer term idea with the notion that the reopen enthusiasm can buoy names like KO.   Premarket up 2%. Strong support at 45. 3.56% yield.