Bulls Recover Key Resistance Levels but Bears Win the Week

August 23, 2021 By: Todd Mitchell
The stock market rallied to close sharply higher on Friday as better-than-expected earnings and oversold conditions fueled sentiment. Volatility fell back below a key level of support as monthly August options expired although the gains weren’t enough to offset a losing week for the major indexes.
 
The Russell 2000 ended at 2,167 (+1.7%) after hitting a late day high of 2,169 and recovering its 200-day moving average. Lower resistance at 2,150-2,175 was cleared and held. A close above the latter would suggest a retest towards 2,200-2,225. Below is a chart of the IWM.
 
The Nasdaq closed at 14,714 (+1.2%) and back above its 50-day moving average with the peak reaching 14,722. Lower resistance at 14,700-14,850 was recovered. A close above the latter and the recent all-time high at 14,896 would indicate strength towards 15,000-15,150.
      
The S&P 500 tagged a high of 4,444 before finishing at 4,441 (+0.8%). Lower resistance at 4,425-4,450 was cleared and held. A move above the latter would signal additional upside towards 4,475-4,500 with last Monday’s record top at 4,480.
      
The Dow snapped a three-session slide after trading up to 35,177 before settling at 35,120 (+0.7%). Prior and lower resistance at 35,000-35,250 was recovered. A pop above the latter would be a renewed bullish development for additional gains towards 35,500-35,750 with the lifetime peak at 35,631.
 

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ANALYST UPGRADES/DOWNGRADES

Mosaic (MOS) and CF Industries (CF) upgraded to Buy from Hold at HSBC
LendingClub (LC) upgraded to Buy from Hold at Maxim
Petco (WOOF) upgraded to Outperform from Neutral at Credit Suisse

Baidu (BIDU) downgraded to Sell from Hold at Erste Group
Duke Energy (DUK) downgraded to Sector Perform from Outperform at RBC Capital
Intercept (ICPT) downgraded to Sell from Neutral at Goldman Sachs

MONDAY'S EARNINGS ANNOUNCEMENTS 
Before the open: CNFinance Holdings Limited (CNF), FinVolution Group (FINV), Ituran Location and Control (ITRN), JD.com (JD), Madison Square Garden Entertainment (MSGE), Smart Share Global (EM), Tuniu (TOUR), VivoPower International (VVPR)

After the close: Fanhua (FANH), Flexsteel Industries (FLXS), Palo Alto Networks (PANW), Precipio (PRPO), Quipt Home Medical (QIPT), Remark Holdings (MARK)

MONDAY'S ECONOMIC NEWS
PMI Manufacturing Index - 9:45am
Existing Home Sales -
10:00am

METALS/ OIL
Gold closed at $1,784.00 an ounce, up $0.90
Silver settled at $23.11  an ounce, down $0.12
Copper finished at $4.14 a pound, up $0.10
Crude Oil was at $62.25 a barrel, down $1.79
Bitcoin Investment Trust (GBTC) ended at $39.58 ​up $2.09

I hope this helps you prepare for the trading day. Make it a great one!

 Todd Mitchell

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