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Swing Trade Idea – May 22, 2020

Market View

World markets are negative (7:30 AM EDT) in the premarket with USA, Europe and Asia all in the red. Hong Kong is very weak after China  announced a new security law. The USA senate bill had already had a negative impact on China stocks listed in USA. These companies trade on the Hang Seng which is down 5% so expect China stock weakness at the open. China also eliminated a GDP target, which is causing consternation since it’s the world’s second largest economy. Macro factors are aligned for a negative open: flatter yield curve, energy down, USD up and commodities weak.  SPY has bounced 1% from overnight lows at 4am and has a 2 day trading range of 298-291. A gap exists below 292 and fill risk is an issue if 291 level is breached with gusto. Watch the FANG stocks today, they are the key to the market strength

Premarket names:

PANW earnings beat upgrades; SPLK eps beat upgrades;  BABA earnings beat; PDD earnings beat;  MRNA Dr. Faucci cautiously optimistic comments; NVDA positive earnings with datacenter strength,  watch AMD and INTC today. NVDA is expensive but a retail fave.

Stock Idea: PANW Long

PANW is a security company that reported an earnings beat. PANW raised guidance which is a big positive. Analysts are of course chasing price and lifting targets to 280. Security is a sector in favor and look for buyers to enter after a pullback. Expecting a pop on the open followed by a pullback which may be an opportunity for a long. Previous highs are 250 and will be a target.