The SPDR S&P 500 SPY was dropping about 0.6% on Monday ahead of a big week of earnings, where Microsoft Corporation, Meta Platforms, Alphabet, Coca-Cola and multiple other mega-cap companies are set to report.
On Wednesday, Tesla set the tone, kicking off the quarterly earnings season with a double miss, which caused the stock to fall almost 10% the following day and continue to slide on Friday and Monday, dragging the general market lower.
On Friday, the SPY closed under the 200-day simple moving average (SMA) on higher-than-average volume, throwing the stock market into a possible bear cycle.
Whether or not the bear cycle will come into full effect or if the companies reporting earnings this week can cause the SPY to reverse course remains to be seen. Traders who are bullish on the stock market and see the value of diversification, particularly those who choose to capture gains through dividends, can take a position in Innovative Portfolios’ Dividend Performers ETF IPDP.
IPDP is an actively managed ETF that seeks diversified cash flow through dividends, capital appreciation, and options premiums. The fund primarily holds shares of large-cap U.S.-based companies with a history of raising dividends over time.
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The IPDP Chart: IPDP has followed the general market lower since Wednesday but on declining volume, indicating the bears are losing interest. On Friday, the ETF fell under the 200-day SMA and on Monday, IPDP gapped down to start the trading session but was holding steady at the opening price.
- The fund negated its uptrend on Wednesday by forming a lower low, which was under the Oct. 13 low of $15.40 but hasn’t yet confirmed a new downtrend with the formation of a lower high. IPDP is likely to bounce up to at least form a lower high over the next few days because its relative strength index is measuring in at about 35%, putting it near oversold territory.
- On the monthly chart, IPDP is trading in an uptrend and looking to form an inverted hammer candlestick to close out October. If the candle is recognized, IPDP may see bullish price action in November, possibly making the fund a good longer-term hold.
- On the daily chart, IDPD has resistance above at $14.88 and at $15.56 and support below at $14.26 and at $13.88.
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