Momentum levels indicate a shift to the downside, and weak stocks will be the first to trade lower. I’ve identified four names that are breaking down before the market has even moved — and more in Wednesday’s stock market recap.
Eighty-eight percent of stocks are trading above their 50-day moving averages, and 95% are trading above their 200-day moving averages. Today’s four stocks are breaking down when many others are at or near all-time highs, which could be a sign of a looming correction.
Stock Market Recap
In today’s stock market recap, global markets are mixed as investors await key announcements from the Federal Reserve today and Thursday.
The Fed will have a press conference today and comment on inflation. Markets, especially the bond market, will be subdued until today’s announcement. The gross domestic product report will also be released Thursday. This is the biggest report of the quarter and will give investors a glimpse of what’s to come for the rest of 2021.
Analysts expect a 6.5% increase in the quarter-over-quarter annual rate, and a 10.5% increase in personal consumption expenditures annual rate. Any deviation from this will immediately affect the bond market.
President Joe Biden is giving a speech to Congress to lay out his administration’s infrastructure plan. News of tax hikes for wealthy people and corporations may be included, which could negatively impact markets.
Roger’s Radar: 4 Stocks Breaking Down Right Now
Reata Pharmaceuticals Inc. (Nasdaq: RETA) is a Texas-based pharmaceutical company. It isn’t involved in the COVID-19 pharmaceutical stock craze, and it develops antioxidative and anti-inflammatory drugs.
RETA made a multi-year swing low and then pulled back up to a 10-day high. Stocks that are breaking down like to trade down, then move up to the 50-day moving average and continue that trend with lower highs. I’ve said it many times — stocks like to trade in horizontal and vertical moves. The stocks I’ve identified today are trading the same way — this time to the downside.
The other three stocks include another pharmaceutical company, a technology company I’ve been talking about for two weeks, and a mass media company that publishes a popular newspaper.
In today’s video, you’ll learn why the market is getting ready for a big move… get the biggest reports driving bonds and stocks today… whether the Fed will raise interest rates… how dangerous the current momentum level is… the best way to take advantage of current market sentiment… and you’ll get four stocks breaking down right now that could portend a correction.
P.S. It’s been a crazy earnings season so far… And it’s not over yet.
This year’s first-quarter results could set the tone for the rest of the year. Now is the time to get ready for big moves if our economic recovery proves to be on solid ground.
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