Market Radar 28. October 2022

Post-market lows were bought

The SPY closed yesterday almost exactly at the 380 mark. Today, the SPY is expected to open below 380, as Amazon (AMZN) was trading significantly lower than at the day’s closing price in after-hours trading. However, a stock like Amazon is also actively traded after the stock market, which was impressively observed yesterday. About 30 minutes after the close of trading, at 4:30 PM, AMZN was trading at $88.98, a discount of nearly 20% to the day’s close ($110.96). But then buyers grabbed the stock in after-hours trading and achieved that AMZN traded at $96.84 three and a half hours later, at 20:00 PM. After the stock market, stock market participants were thus able to lift the share upwards from the post-market low of almost 9%. Amazon is likely to be subject to volatile fluctuations at the start of trading. 

Amazon’s quarterly figures for the third quarter were roughly in line with expectations. However, the revenue outlook for the fourth quarter has been reduced from approximately $156 billion to $148 billion. Shares from the e-commerce and retail sector could be taken into custody today.

Apple (AAPL), another heavyweight in the SPY, was also actively traded after the stock exchange, as the interpretation of quarterly figures was also pending here. Just after 4:30 PM, AAPL was trading at $137.37, but at 20:00 PM at $145.35. In the after-market period, the share was thus able to recover by more than 4% from the post-market low. Compared to the daily closing price of $ 144.80, Apple was even able to score points at the end of the post-market trading hours with a plus of 0.4%.

The quarterly figures for Apple – as well as at Amazon – were about in line with expectations. However, revenue for the coming quarter was reported at $134 in the conference call. The estimates were only about $129.50.

Yesterday was a day on which there was probably more trading than usual after the stock market. A Tesla, for example, was trading 3% below the day’s closing price at 4:30 PM. Here, too, the price recovered from the post-market low. I didn’t find any news from Tesla and Elon Musk after the stock exchange.

What do we see under the radar of the major US stock indices?

In the meantime, 15 of the 56 industries observed have been awarded the day stamp “Buy or top-up”. So a BuyPower quota of just over 25%. So you could slowly start to dare to follow trends on the long side again.

Breakouts are working again

Since November 2021, trend following and thus also “Sell the Up” worked best on the short side. “Buy the dip” on the long side only works if breakouts are not sold off immediately. In the last seven trading days, for the first time in a long time, we saw stocks hitting new highs looking to move higher without taking a breather. Many of them are now in overbought territory. As soon as flags, pennants or even better: flat bases form, buy-the-dip opportunities will arise again for traders who favor an entry with controllable risk and stop management. Currently, there are not many of them; but I will fill my watchlist with such “buy the dip” candidates.

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