Stock Market Outlook for November 25, 2020
The year-to-date change in home prices is amongst the best on record as the demand for homes in this pandemic flourishes.
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*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.  As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Federated Investors, Inc. (NYSE:FII) Seasonal Chart
Toromont Industries Ltd. (TSE:TIH.TO) Seasonal Chart
Winpak Ltd. (TSE:WPK.TO) Seasonal Chart
Katanga Mining Limited (TSE:KAT.TO) Seasonal Chart
Hersha Hospitality Trust (NYSE:HT) Seasonal Chart
Corcept Therapeutics Inc. (NASD:CORT) Seasonal Chart
Covanta Holding Corp. (NYSE:CVA) Seasonal Chart
Ecology and Environment, Inc. (NASD:EEI) Seasonal Chart
Bausch Health Companies Inc. (TSE:BHC.TO) Seasonal Chart
iShares MSCI Mexico Capped ETF (NYSE:EWW) Seasonal Chart
Invesco NASDAQ Internet ETF (NASD:PNQI) Seasonal Chart
Invesco Active U.S. Real Estate ETF (NYSE:PSR) Seasonal Chart
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The Markets
Stocks jumped on Tuesday as investors rejoiced in the news that the Trump administration had cleared the way to make federal resources available to President-elect Joe Biden’s transition into office. The S&P 500 Index gained 1.62%,bouncing from support presented by previous trend channel resistance around 3550. The breakout of the approximately 300-point span between 3200 and 3500 projects an upside target of 3800, now 4.5% above present levels. With positive tendencies for stocks into the start of December and through the last couple of weeks of the year, this target could easily be achieved by the start of January.
Looking at the price action in more detail through the view of an hourly chart, the large-cap benchmark pushed its way through short-term resistance at 3625, leading to a consolidation process through the afternoon session. Another range on this shorter-term look between 3525 and 3625 calculates an upside target towards 3725 now that the upper limit of the prior span has been broken. Resistance at the all-time intraday high of 3645 is directly overhead. All major moving averages on this look (the 20, 50, and 200-hour) are all pointing higher, suggesting an upside bias.
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On the economic front, Case-Shiller released its latest look at the state of home prices in the US. The headline print of the September report indicated that home prices increased by 1.3% at the end of the third quarter, more than double the 0.5% increase that was forecasted by analysts. Stripping out the seasonal adjustments, home prices in the 20-largest cities in the US actually increased by 1.2% in September, which was also much stronger than the consensus analyst estimate that called for a rise of 0.6%. This is the best September increase in the past two decades and much stronger than the average change for the month of a mere 0.1%. The year-to-date change is now higher by 6.3%, which is 1.8% above the seasonal average trend through the first three quarters of the year. This is the best performance through this point in the year since 2013.   Subscribers can login to the database to view all of the charts for this report at https://charts.equityclock.com/sp-corelogic-case-shiller-home-price-index-city-breakdown.
Sentiment on Tuesday, as gauged by the put-call ratio, ended overly bullish at 0.64.Â
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Seasonal charts of companies reporting earnings today:
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S&P 500 Index
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TSE Composite
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