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Swing Trade Ideas – May 28, 2020

Market View

Ahead of USA and GDP reports the US markets are mixed with weakness in Nasdaq stocks and continuing strength in small caps. China markets are weak and Europe strong so no broad support.  Bonds are flat as is WTI oil so not providing a direction. Last 2 days the market has been rotating from large cap tech to underperforming financials, industrials and small caps. Breadth has been strong but the market cap of the large tech companies can weigh down the S&P500 and Nasdaq. The reaction after the USA reports will indicate whether the sentiment is tilted to recovery or recession. The former can lead to continuation of the current rotation and the latter to a reversal. White house executive order on social media is weighing on social stocks and China/USA tension is weighing on Chinese ADRs.

Premarket names:

DLTR earnings  WDAY earnings BA starting 737max  production, Social media TWTR SNAP FB PINS  China Names JD PDD BILI Gold miners GOLD KL NEM

Stock Idea: DLTR

Dollar Tree reported earnings and revenue beats. Dollar Tree has been a laggard to Dollar General and has alot of upside room. Rising unemployment and a recessionary economy is a good environment for DLTR.  Premarket high is 95.35, well above the expected move. One could look for a morning dip for a day trade. Could also wait for a consolidation  and breakout for a longer term trade with 107 as a target.