Stocks to Watch: SPX, PANW, CMG

SPEAKER_1 (0:00)

Thank you so much, we're joining me right now, Brett Crowther is with us, Senior Manager, Trading and Derivatives Coaching, Charles Schwab, great to see you there, Brett. I wanted to talk first about the S&P 500 tracking a winning week. What levels are you watching today?

Brett Crowther (0:16)

Yes, good to be with you, Nicole. So it's been interesting, you know, the S&P 500 actually made a good run back in August making a bull flag, but it kind of went sideways after that rolling into what we call bull flat. And so we've been waiting for it to actually break out its range from $75.90 all the way up to $78.20. And some of the challenges it's had, well, we've seen fewer and fewer stocks making new 52-week highs.

It brings us into the market breadth discussion, which we've seen fewer stocks there to rally the overall market. But still, it's been holding in in face of the economic, geopolitical issues and possibly changing Fed policies. So if it can break that $78.20 based upon that flag pattern, looking for a target up of words of $81.30, if that doesn't hold, though, and it falls back down to $75.90, we're looking for a downward potential support around the $7,300 range.

SPEAKER_1 (1:05)

All right, we'll watch for that. In the meantime, what a name like Palo Alto. Let's look at that. Palo Alto Networks, which has had an incredible run, and in fact, it's 100% higher year to date, and you're looking at the technicals. Tell me more.

Brett Crowther (1:20)

Yes, this one is interesting. It's had a massive climb over the last six months or so, even last nine months. But the stock has climbed up all the way to about almost 400, and it's been rejected at 400 twice. Now, the stock is trading at 25 times price to sales multiples, and that can get a little rich for some investors. And then also after a monster climb like this, sometimes investors need to acclimate to the new altitude, right? And so what we're seeing here is the same kind of channel that we were just talking about on the SPX. And so we got this 398 as resistance and 326 as support. Those are, that's a wide range. There's actually a shorter term support at 360 Now, if this can, if this bounces off that 398 and comes down, which based upon the RSI, we're seeing some bearish pressure. If you'll note there, there's a resistance line and we've seen it bounce off that in July, August, and even recently here in September. And so we don't see any really bullish pressure coming in, possibly pulling it back down to again, that 360 Now, we're looking at that range though. And so let's talk upside and downside, right to the 398, based on that range, could open up to the 470, but a drop down to that 326 does open the door for a potential longer term drop to the 254 And so we'll have to see if it does pull back, where that 360 will hold and go from there.

SPEAKER_1 (2:40)

Yeah, and we just think about all these tech and cybersecurity names in particular, and what an incredible run they have had. On the other side of the coin is something like Chipotle.

So that's down 15% or so this month. I caught your eye at 3142 today with a down arrow again. Some of your thoughts.

Brett Crowther (3:00)

Well, looking at Chipotle, today is National Quesadilla Day, and so many Mexican restaurants like Chipotle are offering special deals, and what does it do with the chart with Chipotle? Well, they've got a couple of things going on here. First of all, they've seen a slowdown in retail dining traffic, and that's spilled over to that fast casual dining, impacting Chipotle, and also we've all felt the impact of rising food costs, and Chipotle has been unwilling to pass that along to consumers, literally, you know, the consumers, right? And so it's taking a bite out of their margins. And so what we've seen here is this drop down from $39, which it did twice. Now this created a potential double top formation. And so it bounced from 31.5 up to 39, but came back down. So it's at an inflection point right now, we're waiting to see what happens. A break of this 31.5 does open the door for more downward action, all the way down to 34, based upon the distance or the width of that channel. And so we're waiting to see what happens. But from a technical standpoint, looking again at the RSI, it's on a downward path. We're not seeing a lot of bullish momentum coming in and it's starting to break through that 31.50.