Monday saw a reversal of fortune of sorts as the type of names bloodied over much of the past 2 months did the leading while the more slow growth fare lagged. The S&P 500 ended up 0.38% and the NASDAQ 0.98% after both indexes opened slightly in the red. There was no major economic news on the day.
The NASDAQ is back to a key area – that downtrend line than connects highs of the past few months; the last visit here led to an immediate rejection. If you are bearish you can place a short against the index in this general area with a top above the trend line. For the more intermediate term bulls want to see the top dotted line broken to the upside to signify a new high in the index.
A mega merger between AT&T (T) and DirectTV (DTV) was the news of the day – unfortunately for us consumer it will lead to less competition which one used to think was a key to the American economy; now it seems having mega companies and less competition is a national goal. If you are a cynic you’d wonder if the news leaked out more than a week ago by the way the stock moved…
Shares of AT&T slumped after the telecom company launched a $48.5 billion bid for satellite TV operator DirecTV on Sunday. The deal comes as Comcast awaits regulatory approval of its $45 billion bid for Time Warner Cable.
Apple (AAPL) made another attempt at breaking out of a high level flag, so we’ll see if this one fares better than the last attempt. This is always an easy trade; you buy on the breakout and stop loss if it returns into its flag.
Goodrich Petroleum (GDP) is in a more traditional flag pattern – it announced very good results from a new well mid April and exploded higher – it has spent the past month consolidating those gains and as of Friday began a breakout which followed through nicely today.
Zillow (Z) is an incredibly volatile stock intraday but relative to a whole host of other internet type stocks which have been crushed the past 2 months it has shown a lot of relative strength. So if the NASDAQ can finally recover and begin making new highs this looks like a potential leadership stock.