26 December 2019

Open Above 1M 5M EMAs

Amazon.com – Amazon said the holiday shopping season broke all prior records, with “billions” of items ordered worldwide and “tens of millions” Amazon devices purchased.

When Amazon reports good news – the whole market goes up.


Amazon stock has its best day since January after the company boasts of ‘record’ holiday shopping

26 December, 2019 AAPL – Premarket
26 December, 2019 – E Mini S&P Futures /ESH20 At 9:30 AM
26 December, 2019 AAPL – 1st Hour
26 December, 2019 AAPL – 1 Minute
26 December, 2019 AAPL – 5 Minute

Stocks Making The Biggest News : 26 December, 2019

Analysis

8:00AM

Boeing – Boeing remains on watch, after new documents reviewed by a congressional panel revealed what’s being called “very disturbing” revelations regarding the grounded 737 Max jet, according to a congressional aide quoted by Reuters. Boeing issued a statement saying it had proactively brought the documents to the FAA and Congress, and said the tone and content do not reflect “the company we are and need to be”.

Amazon.com – Amazon said the holiday shopping season broke all prior records, with “billions” of items ordered worldwide and “tens of millions” Amazon devices purchased.

Qiagen – Qiagen said it decided against a sale of the company following a review. The Netherlands-based genetic testing firm said it determined that operating as a stand-alone business is its best option. Qiagen said it had gotten several indications of interest, with reports saying one of those potential bids came from medical device maker Thermo Fisher Scientific.

PayPal – PayPal will continue to pursue potential takeover targets in 2020, according to Chief Financial Officer John Rainey. He told the Wall Street Journal there are many acquisition opportunities in the payments sector, with PayPal targeting transactions in the $1 billion to $3 billion range.

Exxon MobilChevron – These and other oil stocks could get a boost as oil prices touch their highest in more than 3 months, boosted by a report showing lower U.S. crude inventories.

TiVo – The digital video recorder maker said it would pay a termination fee of $50.8 million to technology licensing company Xperi under certain circumstances, if their planned all-stock merger does not take place. There are other termination scenarios, according to an SEC filing, in which Xperi would pay TiVo $44 million.

KKR – The private equity firm is buying digital content platform Overdrive from Rakuten for an undisclosed amount. The Japanese e-commerce company purchased Overdrive in 2015 for $410 million.

Spectrum Pharmaceuticals – The drug maker said its experimental treatment for non-small cell lung cancer missed its primary goal in a mid-stage trial.

Open Below 1M EMA above 5M EMA

Strategies

Usually there will be a defined premarket resistance level. The premarket level keeps dropping and eventually falls below the 1M EMA right before market open, where the stock will open.

  • There is a predefined premarket resistance level. May be an early entry point (2nd Bar).
  • If the overall news is bad it will keep dropping.
  • If no significant news, after the initial drop, it will comeback to the 9/15 EMAs.
  • Once the stock starts coming back up – the open/1M EMA or the pre-market resistance may serve as the resistance level

One reason for this scenario is that the stock has had a good run and is now flattening so people decide to sell – anticipating a decline.

Based on 24 December, 2019

Category: OPEN BELOW 1M EMA ABOVE 5M EMA

24 December 2019

Open Below 1M Above 5M EMAs
  • Clear premarket resistance.
AAPL 24 December 2019. Premarket Chart
24 December, 2019 – E Mini S&P Futures /ESH20 At 9:30 AM
AAPL 24 December 2019. 1st Hour

In the transition from pre-market the price drops below the 1M EMA, which is where the stock opens.

AAPL 24 December 2019. 5M Chart.
AAPL 24 December 2019. 1D Chart
The S&P Futures were barely up .75 points on 24th December 2019

Premarket 1M 5M EMA Divergence Example

Analysis

AAPL – 20th December 2019

5M/1M EMAs remain about the same at approx 279.96 until around 7:30. A spike in price starts to accelerate the upwards trend of the 1M EMA. A bigger divergence occurs around 9:15 AM when a sharp spike in price further increases the distance between 1M and 5M 200 EMAs. However the momentum did not continue. The first bar on the 1M chart was red – almost a DOJI signifying confusion not confidence.

Price then found support at 1M EMA line bouncing a couple of times and then eventually heading lower.

Momentum from premarket’s last big move at 9:15 AM did not continue

Premarket 20th December 2019. 1M/5M EMAs diverge because of the spike in prices around 7:30 AM and then later around 9:15 AM
AAPL 1st Hour. 20th December 2019
AAPL 1M. 20th December 2019

Open Above 1M 5M EMAs

Strategies

The premarket price movement will end up with the stock opening higher than the 1 EMA. With a solid 1st bar. If the news is good enough the stock will keep rising. Otherwise we may get a flag in the first few minutes to 9/15 EMAs.

  • Start early
  • Price will stay above 15EMA
  • Let it go until 10:00AM – 10:30AM or longer if able
  • Set stop-loss at purchase price once the price moves higher
  • Keep moving stop-loss up may be .50 cents (.50 DELTA) below the current stock price

Based on 23rd December 2019

Category: Open Above 1M 5M EMAs