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Swing Trade Idea – October 26, 2020

Market View

In the premarket global markets are all in the red with Europe leading to the downside. Catalysts for the weakness today are a lack of a USA stimulus package;  a rise on Covid cases and lockdowns in Europe and a poor earnings report and forecast from SAP (Germany).  US dollar is up, which is a negative for equities, emerging markets and commodities. Yield curve is flatter with a rise in long term yields which is negative for financials.  Last week there was a rotation into the lagging sectors (reflation) and the premarket is currently looking like the reflation stocks are being sold i.e. travel and leisure, financials and small caps down. The FAANGMT stocks are also weak but outperforming to the downside.  The set-up is for a possible trend day down if SPY 340 does not hold but with major companies on deck for earnings it’s more likely that there is a bounce.  Tech is likely the sector that will bounce with companies reporting this week leading.

Premarket names:

SAP earnings miss and poor forecast ORCL CRM sympathy;  FB target raises;  SNAP momo PINS pre-earnings; JMIA momo continuation; AMD preearnings;  ZM green on a weak day; DNKN going private; MRNA preearnings;  NIO  TSLA PLUG BE alternative energy weak; Travel & Leisure  

Stock Idea; AMD

AMD is reporting earnings this week and is attracting buyers with the INTC stumbles. Like the stock into the print and AMD is outperforming in the premarket with a weak tape.  Short term resistance at 83 and 85 with 88.7  a breakout level. High call activity Friday. Expect AMD to be strong if QQQ bounce today.