The SP 500 Has Broken Out To the Upside of an Accelerated Downtrend

The S&P 500 Has Broken Out To the Upside of an Accelerated Downtrend

On Tuesday, Humana (HUM) is awaited to post third quarter EPS of $2.80 compared to $5.03 a year ago on revenue of $18.6 billion vs $16.2 billion last year. Humana is one of the largest private health insurance companies in the U.S. and during October, the Co signed Medicare network agreements with multiple healthcare providers to extend its Medicare Advantage network across multiple states. Technically speaking, the RSI is below its neutrality area of 50. The MACD is below its signal line and negative. The stock price is below its 20 and 50 day MA. We are looking at the final target of $344.50 with a stop-loss set at $420.50.

On Wednesday, Qualcomm (QCOM) is likely to unveil fourth quarter EPS of $1.17 vs $0.78 last year on sales of $6.0 billion compared to 4.8 billion a year ago. The Co makes digital wireless communications equipment and traders are anticipating a move around 8.1%. The stock surged 15.2% after third quarter earnings were reported. From a chartist's point of view, the RSI is below its neutrality area at 50. The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the stock is trading under its 20 day MA ($125.87) but above its 50 day MA ($119.51). We are looking at the final target of $110.30 with a stop-loss set at $130.50.

On Thursday, Alibaba (BABA) is expected to announce second quarter EPS of $14.28 compared to $13.10 a year ago on revenue of $155.8 billion vs $119.0 billion last year. Alibaba is the world's largest online and mobile commerce company, and on October 26th, BMW and the Co announced a plan to partner on digital operations, services and marketing for BMW vehicles in China. From a technical point of view, the RSI is above its neutrality area at 50. The MACD is below its signal line and positive. The stock could retrace in the short term. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $304.44 and $289.51). We are looking at the final target of $338.00 with a stop-loss set at $289.00.

Additionally on Thursday, Electronic Arts (EA) is anticipated to release second quarter EPS of $0.05 vs $0.97 last year on revenue of $969.4 million compared to $1.3 billion a year ago. The Co is a global developer and publisher of video games, and on October 9th, the Co launched its newest video game FIFA 21. Looking at a daily chart, the RSI is trading below 30. This could mean that either the stock is in a lasting downtrend or just oversold and that therefore a rebound could shape (look for bullish divergence in this case). The MACD is negative and below its signal line. The configuration is negative. Moreover, the share stands below its 20 and 50 day MA (respectively at $127.73 and $130.57). We are looking at the final target of $108.90 with a stop-loss set at $128.60.

Looking at the S&P 500 CFD on a 30 minute chart, the index has broken to the upside of an accelerated short-term downtrend that began two weeks ago on October 12th. Traders and investors should beware of increased volatility this week as US elections take place on Tuesday, November 3rd. The index will likely continue to advance and breakout to the upside of the first resistance level at 3,342.00. After 3,342.00 the index will probably reach for 3,370.00. If price can get above 3,370 its third target is at 3,418.00. On the other hand, if the index slips it will probably find support at 3,276.00. If 3,276.00 fails to support price then the last level of support is 3,234.00. If price cannot hold above 3,234.00 it would be a very bearish signal that could send the index tumbling down.

Source: GAIN Capital, TradingView

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.