This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, NXPI
Deal or no deal? Overall it sounds like some progress was made over the weekend at the G20 summit between the US and China. But overall from the few pieces I have read, there is plenty of work to be done, and the bulk of the work will be done in the months that follow.
I was slightly shocked to see that the NXPI and Qualcomm deal came up in the meetings. I would be shocked if the two companies came together again, it likely won’t happen. But it may pave the way for other chip deals to get done.
I would think overall the chips stocks are likely one of the big winners. The sector has been pounded since the middle of September and has basically been dead money for a year now.
The SMH ETF closed on Friday right around resistance at $96.75, and I think the ETF could be on its way to around $101.
It looks like Intel finally broke out on Friday rising above resistance at $49. I think that sets up a move to $52.50.
Talking about NXPI, this stock has fallen a long way since the $127.50 bid from Qualcomm fell through. Now the stock sits at $83.40 and trades for less than ten times 2019 earnings estimates. Analysts see earnings growth of 19%+ per year in 2019 and 2020. Meanwhile, revenue growth is expected to accelerate to 3% in 2019 and 6% in 2020. The chart looks fairly bullish too and suggests the stock may return to the mid-’90s.
Caterpillar broke out on Friday rising to $135 and could be on its way to $141 or perhaps $145. Caterpillar is heavily tied to China.
Apple is nearing a reversal and a potential break out should it get over $180. I think for now at least the fear of an iPhone tax has been put on hold, and so is the idea that China will boycott the iPhone. I believe that it will result in a breakout for the stock and the shares increasing back to $186 and perhaps as even as high as $195.
Alibaba is also breaking out and appears to be on its way to $167.
JD may be on its way back to around $23.
Moving on to other stocks, Amazon also cleared some resistance and is likely on its way back to $1760.
Facebook may be on it way back to $148 .
S&P 500 (SPX)
The S&P 500 broke significant resistance at 2752, and I think that sets us up for a retest of 2820. A rise above 2,820 I think sends to a new all-time high. Yes. I think we will see a new all-time before year end.
Russell 2000 (RUT)
The Russell is likely on its way back to 1590
Ten-year yields are very close to breaking lower and it may very well be on its way to 2.8%. That is more bad news of the bank stocks. More Bad News For Bank Stocks
Good Luck this week
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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