EarningsBeats.com Digest for February 23, 2022
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Price Support: To Hold or Not To Hold, That's the Question
I've been discussing neckline price support for the past couple months. I initially began discussing the idea that we'd first go down to test 4300 on the S&P 500 in January back when we were at an all-time high, which we did. After a huge reversal on January 24th, the S&P 500 clearly established neckline support at that 4300 level.
On Tuesday, the S&P 500 revisited that 4300 support level, briefly clearing that support as price fell to 4267. But we saw a rally in the afternoon and the S&P 500 held support.....barely:
Below the S&P 500 price chart, I've listed four separate equities - JB Hunt Transports (JBHT), KLA Corp (KLAC), Penske Automotive Group (PAG), and Advanced Auto Parts (AAP). I simply wanted to point out some of what's taking place in the stock market right now. How many stocks can hold support? And which stocks cannot? Currently, JBHT and KLAC both have tested key price support, but continue to close above it. The two specialty
retailers - PAG and AAP - both caved on Tuesday and lost support on fairly heavy volume. It was not a good look for these two. If more and more companies fail to hang onto price support, that will eventually make it nearly impossible for our benchmark S&P 500 to hang onto its neckline support.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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