7 Monster Stock Market Predictions For The Week of Oct. 5

By Michael Kramer of Mott Capital Management

Founder/CEO at Mott Capital Management, LLC • Oct 4, 2020 at 2:13 PM EDT

Stocks were up last week, but made little headway after Monday’s gap higher. Stimulus talk managed to keep things afloat, but then weakness began to re-enter the markets by Friday after the S&P 500 rejected Thursday’s break out attempt.

Stocks were up last week, but made little headway after Monday’s gap higher. Stimulus talk managed to keep things afloat, but then weakness began to re-enter the markets by Friday after the S&P 500 rejected Thursday’s break out attempt, as it moved back below the 50-day moving average.

S&P 500 (SPY)

But more importantly, a bearish pattern has formed across the S&P 500 and a number of the leading stocks in the market. The S&P 500 appears to have developed a bearish flag/pennant. This negative continuation pattern suggests the index is likely to take a leg lower this week, with the critical level to watch for coming at 3,200.

NASDAQ 100 (QQQ)

The Nasdaq 100 also formed a bearish rising wedge pattern last week, dropping out on Friday. This suggests we may see lower prices this week, possibly heading towards $265.

Apple (AAPL)

Apple is just one of those stocks that seems to reflect that same bearish pattern. Meanwhile, a drop below support at $110.50 is likely to lead to a decline to $104.

Amazon (AMZN)

Amazon is exhibiting that same pattern, with a drop below resistance at $3,100 possibly leading to a decline to around $2,870.

Facebook (FB)

The same pattern also exists for Facebook, with the potential for the shares to fall to around $241.

Alphabet (GOOGL)

The same pattern also exists in Alphabet, with the potential to fall to around $1,360.

PayPal (PYPL)

The same pattern is also present in PayPal, with the chance to decline to around $171.

I guess you get the point, the same pattern is in a lot of places.

Disclosure:

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL.

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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