US stocks pullback to start the week

Summary:

• US Stock benchmarks set to begin lower

• S&P500 breaching H1 cloud 

• Apple to begin lower after downgrade to “sell”

US equities ended Friday at their highest ever weekly closing level after a fairly volatile session around the NFP release. S&P500 futures had already eked out a fresh all-time high above the 3000 handle before the jobs data hit, but the market reacted negatively to an all round solid release by selling off by more than 30 points from the highs. The rationale behind this move was seemingly that a good employment figure could reduce the chances of a Fed rate cut at the end of the month and therefore that good news was perhaps bad for stocks. 

As has been the case of late however, the decline provided a nice buying opportunity and the S&P500 recouped the entire post-release decline to and the day back above where it traded before the data dropped. Long-term the market remains in a clear uptrend with a potential breakout still in play, but shorter-term there is some suggestion that a pullback could be due.

Price is now attempting to break back below the Ichimoku cloud on H1 and if this occurs then it could be seen to signal a turn lower in the near-term trend. Possible levels to watch below if this does occur are 2971 (Friday’s low), 2955 (last week’s low) and 2943 (the level price gapped higher from at the end of last month. Source: xStation  

Looking at company news and Apple could be worth keeping an eye on at the open, with the stock called to begin lower by over 1% after a downgrade from Rosenblatt Securities to “sell” from “neutral”. The broker stated that while it did not think the stock was a short, they do “believe Apple will face fundamental deterioration over the next 6 to 12 months” maintaining a 12-month price target of $150. “Adding to our ‘sell’ thesis, we believe new iPhone sales will be disappointing, iPad sales growth will slow in the second half of 2019, other product sales growth, such as the HomePod, AirPod, and iWatch, may not be meaningful to support total revenue growth,” they said.      

Shares in Apple are called to start lower around the 200 mark after a broker downgrade. The stock has been on a good run higher in recent weeks but still remains beneath potential swing resistance around 214. Source: xStation