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Nov. 30, 2020, 9:37 a.m. EST

Look for tech stocks to come roaring back and help drive the S&P 500 higher into year-end, says this strategist

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By Barbara Kollmeyer

Stock investors could be forgiven for some fatigue that is showing up on Monday, the last day of what has been a blockbuster month for stocks.

The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.72% and Dow industrials /zigman2/quotes/210598065/realtime DJIA -0.57% are set for their best Novembers since 1928, with the Dow also set for its biggest monthly return since January 1987.

But there is still some fuel for buying for the next few weeks, says our call of the day from Adam Kobeissi, founder and editor in chief of The Kobeissi Letter.

“While we do believe that many bearish headwinds persist in this market, we no longer view short-term price action with a bearish context due to the concept of ‘market euphoria,” Kobeissi tells clients in a newsletter. “The S&P 500 has continuously driven to psychological targets, such as 3600 and a new all-time high, which can easily drive the index to 3700+.”

And while the U.S. is seeing COVID-19 related shutdowns, the economic data continue to hold up thus far, he says.

“The 7-day average of percentage of positive cases in the United States also dipped below 10.0% last week, to close at 9.4%. If this can continue to drop, specifically below 8.0%, then equities will continue to look past the short term headwinds of the pandemic,” says Kobeissi.

Investors will, of course, be watching to see if too many Thanksgiving get-togethers send cases and hospitalizations soaring even more in the next couple of weeks. But about the only “fundamental catalyst” that could keep the S&P 500 down is the failure of COVID-19 vaccines, he says. And the news has been pretty good this month, hence the stock gains.

Kobeissi also advises investors to keep an eye on technology stocks, which have been less euphoric as of late, but may be raring for a comeback.

“FAANG (Facebook /zigman2/quotes/205064656/composite FB +2.33% , Apple /zigman2/quotes/202934861/composite AAPL -1.37% , Amazon.com /zigman2/quotes/210331248/composite AMZN -0.74% , Netflix /zigman2/quotes/202353025/composite NFLX -0.58% and Alphabet’s Google /zigman2/quotes/202490156/composite GOOGL -0.19% ), in particular, have the potential to recover and lead the next leg higher as hospitality stocks have taken the lead for this initial move to all-time highs,” says Kobeissi.

Netflix, has grabbed his attention. Missing out on the recent rally, the streaming platform has been stuck in a tight range of between $475 and $500 a share for a few weeks now, he says. That range is stuck inside an even bigger one, of $460 to $575, that seems to be “building energy for an upward breakout over the next few weeks,” says Kobeissi.

Providing Netflix stays above $460 to $475, he says shares could hit $520 a share, but he advises investors to be wary in case shares drop below that support range. That would be his sign to back away, he says.

The markets

U.S. stocks /zigman2/quotes/210598065/realtime DJIA -0.57% /zigman2/quotes/210599714/realtime SPX -0.72% /zigman2/quotes/210598365/realtime COMP -0.87% are trading mostly low er, along with European stocks /zigman2/quotes/210599654/delayed XX:SXXP -1.01% . Asian stocks fell across the board .

Oil prices /zigman2/quotes/211629951/delayed CL.1 -2.86% are dropping as the Organization of the Petroleum Exporting Countries gets ready for a virtual meeting on Monday.

Cryptocurrencies are climbing, with bitcoin /zigman2/quotes/31322028/realtime BTCUSD -0.49% above $18,000.

Read: Key reasons bitcoin prices are tumbling and what may propel them higher

/zigman2/quotes/210599714/realtime
US : S&P US
3,768.25
-27.29 -0.72%
Volume: 2.74B
Jan. 15, 2021 5:18p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
30,814.26
-177.26 -0.57%
Volume: 440.02M
Jan. 15, 2021 5:18p
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/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 251.36
+5.72 +2.33%
Volume: 24.94M
Jan. 15, 2021 4:00p
P/E Ratio
28.62
Dividend Yield
N/A
Market Cap
$699.65 billion
Rev. per Employee
$1.57M
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/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 127.14
-1.77 -1.37%
Volume: 111.60M
Jan. 15, 2021 4:00p
P/E Ratio
38.92
Dividend Yield
0.64%
Market Cap
$2168.69 billion
Rev. per Employee
$1.86M
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,104.25
-23.22 -0.74%
Volume: 4.24M
Jan. 15, 2021 4:00p
P/E Ratio
90.91
Dividend Yield
N/A
Market Cap
$1569.21 billion
Rev. per Employee
$351,531
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/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 497.98
-2.88 -0.58%
Volume: 5.90M
Jan. 15, 2021 4:00p
P/E Ratio
80.45
Dividend Yield
N/A
Market Cap
$221.28 billion
Rev. per Employee
$2.34M
loading...
/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 1,727.62
-3.30 -0.19%
Volume: 1.57M
Jan. 15, 2021 4:00p
P/E Ratio
34.50
Dividend Yield
N/A
Market Cap
$1173.89 billion
Rev. per Employee
$1.36M
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
30,814.26
-177.26 -0.57%
Volume: 440.02M
Jan. 15, 2021 5:18p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,768.25
-27.29 -0.72%
Volume: 2.74B
Jan. 15, 2021 5:18p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
12,998.50
-114.14 -0.87%
Volume: 5.80M
Jan. 15, 2021 5:16p
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/zigman2/quotes/210599654/delayed
XX : STOXX
407.85
-4.15 -1.01%
Volume: 0.00
Jan. 15, 2021 11:03p
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/zigman2/quotes/211629951/delayed
US : U.S.: Nymex
$ 52.04
-1.53 -2.86%
Volume: 149,492
Jan. 15, 2021 5:00p
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/zigman2/quotes/31322028/realtime
US : CoinDesk
36,146.01
-177.61 -0.49%
Volume: 0.00
Jan. 15, 2021 9:57p
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