Next Day Prep: Tech Stocks Sink, Healthcare Surges Trading Takeaways
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
What a day in the markets! A broad-based rally unfolded with some notable crosscurrents beneath the surface. While the major averages reclaimed their 50-day moving averages, the tech sector faced challenges, particularly in chip stocks.
Overnight Headlines
- Nvidia (NVDA) faced pressure due to report on Alphabet’s A-I chip competition.
- Advanced Micro Devices (AMD) also struggled, contributing to tech sector flatness.
- Healthcare surged over two percent, driven partly by news on President Trump’s healthcare plan.
- Consumer discretionary and small caps saw notable gains, showcasing broad market advance.
Economic Announcements
The odds of a December rate cut remain high, with mixed economic data. While retail sales hinted at consumer slowdown, Producer Price Index (PPI) and consumer confidence added complexity to the rate cut narrative.
Earnings Highlights
Potential Trade Ideas:
- Buy: Eli Lilly (LLY) on pullback towards $1104-$1106, targeting $1120.
- Watch: Regeneron (REGN) for breakout above $790 with possible run to $800.
- Spotlight: Abercrombie & Fitch (ANF) showed positive signs post-earnings with strong brand performance and aggressive buybacks.
Top Movers
Upgrades & Strong Earnings:
- Applied Materials (AMAT) upgraded to Buy at UBS.
- Best Buy and Kohl’s: Solid earnings and optimistic guidance in the retail sector.
- Zoom: Beat estimates and announced stock buyback increase by a billion dollars.
Quick Trade Ideas
Focus on healthcare and biotech leadership. Watch for continuation setups in LLY and REGN. Utilize key index levels as trading guideposts and manage risk methodically.
Key Takeaway
The market exhibits momentum with a cautiously bullish tone. Traders should stay vigilant, leveraging healthcare opportunities while being prepared for potential market fluctuations around major index levels.