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Swing Trade Idea – September 08, 2020

Market View

In the premarket the global indices are generally negative with the USA red, Japan red, Europe red, China red and Asia ex-Korea red.  Oil is lower as Saudi Aramco is reducing prices; yield curve is flatter as long rates pull back; USD is higher with Euro lower on Brexit disagreement weak economic data; and Japan contracting;  all of which are not positive for equities. In the USA markets, the Nasdaq is leading to the downside, with the FAANGMT stocks and the tech stocks with the highest YTD gains leading to the downside, continuing the slide from last week. S&P500 is adding CTLT, ETSY and TER but importantly not adding TSLA, which is leading to major TSLA selling pressure.  The stocks being added may get a bid today.  Today one should watch the FAANGMT and indices if they test the Friday lows.  SPX has moved down to a level where put buying can lead to a sharper move down so one must be prepared for a bounce and a sharp move down.

Premarket names:

FAANGMT NVDA … all moving down, could turn up today, if not look for potentially larger move down. TSLA not added to S&P500;  ETSY TER CTLT added to S&P500; GM NKLA partnership; DIS Mulan downloads; VZ, JNJ, T, MO MO safety names getting a bid

Stock Idea; KO

As the tech stocks weaken, there is some rotation into DJIA stocks by managers who need to remain invested. One name to consider is KO as a long. KO is flagging above the 200 sma and getting a bid in the premarket. One could consider a long with the 200 sma (50) as a decision level, VPOC 53.8 as target one and 60 as a long term target.