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Swing Trade Ideas – June 16, 2020

Market View

Markets are broadly positive on the back of the Fed buying individual corporate bonds and rumors of $1T infrastructure plan. The world markets are all green with particular strength in Asia. Yield curve is steeper which is constructive for the Russell 2000 and DJIA. Strength in travel stocks, banks, energy, semiconductors.  The FAANGM stocks are strong, which can support the markets while the focus can shift back to financials, industrials and other cyclicals. The infrastructure plan would include roads and 5G wireless. Names moving CAT NUE QCOM CSCO. It is so far a rumor and not an official plan so tread softly. Drug stocks, which are out of favor are getting a pop with LLY, may be a short term

Premarket names:

IQ Tencent buying equity from BIDU; LEN earnings; Infrastructure CAT NUE QCOM CSCO CIEN; LLY FDA approval for insulin drug; TSLA Model S EPA rated 402 miles

Stock Idea – CAT

CAT is a beat-up name highly dependent on the world economy (which is weak).  It can benefit from the infrastructure plan but also from a weaker USD and a revival of the world economy.  If meme shifts for a few days to growth returning and buying the cyclical names, CAT can gain. Technically weak with a gap fill possible above 126 to 132.  Extended in premarket, look for pullback at open. Possible swing trade if and only if infrastructure plan has legs.