Buy Qualcomm And Sell Short Incyte

The S&P rose about 13 points (0.04%) in the week. This is post-OPEX (options expiration) week, which actually has a positive bias unlike the OPEX weeks in the other months. This and the daily S&P 500 cycle suggests higher prices next week. Nine of the last eleven buy signals have proven to be profitable. Expect moderately higher prices. The 26th (Wednesday) is likely a high.

In addition, the end-of-month (EOM) period of strength runs from August 22 through September 7. This is actually the weakest of the 12 EOM periods. In 2020, September is likely to be a down month but without substantial magnitude. Therefore, there appears to be little upside S&P 500 potential into late September.

Here are two stock recommendations for the short term.

The Qualcomm daily cycle reaches a low this week. The cycle tops on September 10th. All ten buy signals in the last year have been successful. The monthly cycle is also rising, providing an added degree of assurance. The $115 area or higher is a likely objective. Relative strength bottomed in 2018 and the stock may be making a longer-term low.

Chart 1

Chart 2

Chart 3 shows that the daily Incyte cycle tops on 21st and bottoms on September 2nd. Eleven of twelve sell signals have been profitable in the last year, and the monthly cycle is also falling. The stock is likely to fall to the mid $80 area. Relative strength has been weakening since April.   

Chart 3

Chart 4

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