Upticks - January 2024
Upticks – Newton’s Law
(New Additions in Bold)
9 New Additions
- NFLX -0.63% – Netflix Inc
- AMZN 3.36% – Amazon.com Inc
- DKNG 4.94% – DraftKings Inc
- DPZ 0.87% – Domino’s Pizza Inc
- AXP -0.62% – American Express Co
- BRK/B – Berkshire Hathaway Inc
- LLY 1.15% – Eli Lilly & Co
- CPRT 0.92% – Copart Inc
- WDC 2.76% – Western Digital Corp
Laggards
All Laggards have been deleted as of January’s Upticks Release.
Upticks Commentary (Commentary on 10 of 15 names)
Below is a write-up of 10 of the 15 stocks selected for January’s UPTICKS list.
Advanced Micro Devices (AMD- $177.83) Bullish; Gains to $218 look likely
Resistance $200, $220, Support $150
AMD is the best performing of any of the 30 members that make up the Philadelphia Semiconductor index on a three-month basis, higher by 81.91% through Friday 1/26/24. However, its recent outperformance could be likely to continue given that the stock has just exceeded former all-time highs just two weeks ago with its gains above $164.46 from 11/2021.
Momentum has reached overbought levels, but I believe evidence of any counter-trend exhaustion remains premature at this time. Thus, its recent breakout stands an excellent likelihood of continuing in the weeks/months ahead. Initial resistance lies near $200, but movement above that should help AMD reach $218 which represents a confluence from two different methods of upside exhaustion.
Pullbacks in February should represent attractive opportunities from a risk/reward standpoint, with support found near $150. Overall, while AMD’s 12-month return has paled to NVDA, it looks more appealing from a risk/reward standpoint given its recent breakout back to new all-time highs.
Amazon.com (AMZN 3.36% – $216.26) –AMZN likely to retest highs in 2024
Support- $146, Resistance- $180, $188
AMZN has slowly but surely begun to demonstrate some mean reversion following its steep decline from 2021 peaks. While this formerly showed some underperformance vs. the large-cap Technology space, that has begun to change since last October. AMZN’s move back above $150 helped this to show some sharp outperformance vs. quite a few of its peers, and it currently has outperformed other “Magnificent 7” names like AAPL for nearly the last nine months.
While weekly momentum has moved back to overbought levels, this likely should continue to push higher given its ability to have jumpstarted its momentum over the last few months. Moreover, the act of AMZN 3.36% having exceeded its 61.8% Fibonacci retracement shows little technical resistance ahead of $180, then $188 near Fall 2021 peaks.
Bottom line, I expect AMZN’s recent period of “catch-up” to continue and favor this to show additional absolute and relative strength in the months to come. Support on weakness should make this quite attractive near $146, while resistance targets as mentioned, lie near $180, then $188.
American Express (AXP -0.62% – $200.86) – Recent breakout has helped jumpstart AXP’s momentum
Support- $190, Resistance- $230, $260
AXP is quite appealing technically following Friday’s (1/26/24) breakout back to new all-time high territory. The company reported record full year revenue and a promising 2024 Earnings forecast which promptly led to a surge back to new highs.
This breakout is attractive technically given the spike in volume to the highest levels since December 2023. Despite momentum having pushed back to overbought levels, its structure improved materially on the breakout, and no evidence of counter-trend exhaustion signals are currently present on daily, weekly, nor monthly timeframes. I’m expecting a push up to $230, then $260, and feel that any dip back down under $200 would make this an even better risk/reward technically, particularly at/near $190.
In my experience, it’s always important to monitor stocks that are exceeding prior highs which were made 1+ years ago which occur on above-average volume. AXP looks to have joined the ranks of other technically attractive credit card companies like V, and MA which have pushed back to new all-time high territory. Overall, this breakout should likely help to jumpstart AXP’s momentum after the last couple years of consolidation and AXP looks bullish here.
Berkshire Hathaway Inc. – Class B – $383.19 – Cup and Handle breakout
Support- $375, Resistance- $412, $462
Berkshire Hathaway appears like one of the better stocks within the entire Financials sector technically speaking and remains the largest percentage holding of SPDR Select Financials ETF at over 13%.
Its recent breakout back to new highs took the shape of a Cup and Handle breakout from early 2022 which has helped the short-term momentum and broader technical structure improve following a choppy period from early 2022.
Gains look likely up to $412 initially, then $462 which marks a significant Fibonacci-based alternate projection compared to the initial lift off the 2020 lows.
Any pullback to consolidate the recent breakout into February should prove short-lived and should likely find strong support near $$375 which would represent a very attractive risk/reward opportunity for BRK/B.
Copart (CPRT – $48.66) Minor consolidation within steep uptrend makes this attractive
Support- $42, Resistance- $61, $67
Copart has largely avoided much of the turmoil that’s happened to the Automotive stocks lately and this remains quite attractive technically.
Technically CPRT 0.92% has maintained a stellar uptrend for the last eight years, with the fear market of 2021-2022 providing just a minor speedbump before this turned back higher.
Since 2016, CPRT has rallied over 1100% and has doubled just since mid-2022.
Its recent consolidation from December 2023 does not look serious, technically speaking, having failed to break its ongoing two-year uptrend.
Movement back to new highs looks likely following this recent pullback and initial targets lie near $61, then $67 which should represent formidable resistance ahead of possible consolidation.
Overall, until/unless its current uptrend is violated, CPRT looks attractive technically, but support should materialize near $42 on any further weakness.
DraftKings (DKNG – $39.91) Technically DKNG looks worth “betting on”
Support- $32, Resistance- $43, $49
Draftkings is a newcomer to this list, but the degree to which this stock has recently come back to life makes it worth “betting on” technically speaking.
DKNG has begun to move higher in a bit of a quicker pace lately and has gained more than 52% since bottoming a little more than three months ago from 10/26/23.
Volume has increased on the rally off October 2023 lows, and its current trend of higher highs and higher lows since early 2023 remains intact.
Gains up to $43 look likely initially, which marks the upper end of its current upsloping channel. However, DKNG 4.94% is likely to eventually continue its rise to near $49 which is a strong area of resistance for Spring 2024.
The degree of momentum acceleration in recent months makes this attractive to consider despite this being well off its 2021 peaks.
Support on any consolidation should arise near $32 and would be an area to consider this an even more appealing candidate from a risk/reward perspective.
Domino’s Pizza (DPZ – $433.44) Lengthy Reverse Head and Shoulders breakout is constructive
Support- $410, Resistance- $461, $567
Domino’s is another name which is technically quite appealing despite being well off its all-time highs.
Weekly charts show the recent two-year pattern breakout in DPZ 0.87% of its massive reverse Head and Shoulders pattern. This is quite bullish technically, suggesting upside follow-through to $461 initially, then $567 near its former all-time highs.
Support on pullbacks lies near $410, which would represent a return to the pivot spot of DPZ’s recent breakout.
Overall, this looks appealing technically and merits consideration as a stock which could now likely begin to play “catch-up” in 2024 following this recent breakout.
Eli Lilly (LLY – $645.00) Ongoing strength makes this quite attractive technically
Support-$600, Resistance- $677, $722
Eli Lilly continues to trade within a very steep, well-defined uptrend with little to no evidence of any major technical deterioration.
The stock has more than doubled since its March 2023 lows, but most of its consolidation attempts fail to violate any technical structure before turning back higher.
Its most recent consolidation from September 2023 into January 2024 looks to be a similar case of minor churning being resolved back to the upside.
This Q4 consolidation helped to alleviate some of the overbought conditions. Yet, its breakout in early January should now help LLY 1.15% lift to technical targets at $677, then $722.
Support on minor weakness lies at $600, but long-term trend followers might decide to use $575, near its Q4 swing lows, which also look important as a secondary level.
Overall, LLY looks like one of the best stocks within the Healthcare sector and still looks appealing to push higher given its current technical structure.
Netflix (NFLX – $575.79) “Streaming” back to former highs looks likely
Support- $530, Resistance- $661, $700
NFLX’s short-term breakout last week makes a retest of former all-time highs likely in the months ahead. Last week’s move back above consolidation highs near $500 from late December 2023 helped to jumpstart its short-term momentum and lifted NFLX to the highest levels since early 2022.
Despite the sudden push to overbought territory on many momentum gauges, NFLX looks appealing to own for further technical strength up to challenge all-time highs near $700 from late 2021.
Any pullback into February would make this more attractive from a risk/reward perspective, and should merely serve to help alleviate overbought momentum readings before this pushes back to $700.
Overall, the constructive breakout last week makes this more attractive structurally and counters any idea of overbought momentum readings being a concern. NFLX’s recouping of its 61.8% Fibonacci retracement area leaves little former resistance between current levels and all-time highs. It looks right to own at current levels for those with long-term perspectives, and an ideal area of support might materialize near $530 on any minor stock market weakness in the weeks to come.
Western Digital (WDC – $59.75) Long-term breakout likely helps WDC to play “catch-up”
Support- $55, Resistance- $68, $77
WDC has made the UPTICKS list despite being well off all-time highs. However, the act of having exceeded its lengthy downtrend from 2021 which directly coincided with a high volume breakout makes WDC quite appealing technically.
Moreover, a period of mean reversion higher looks to be underway for WDC which likely can rise to hit $68, then $78 which would approximate the area near former 2021 peaks.
Overall, the act of having achieved a multi-year breakout has helped to reignite this stock’s momentum, and I suspect that WDC’s corrective decline from 2018 being resolved should eventually allow for a push back to new all-time high territory.
Pullbacks likely find strong support near $55 and any decline in February would likely represent an attractive opportunity for WDC 2.76% following its recent technical breakout.
Upticks Deletions
