MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, NXPI
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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.
Chips
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.
SMH
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.
Intel (INTC)
It looks like Intel finally broke out on Friday rising above resistance at $49. I think that sets up a move to $52.50.
NXP (NXPI)
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 (CAT)
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 (AAPL)
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 (BABA)
Alibaba is also breaking out and appears to be on its way to $167.
JD
JD may be on its way back to around $23.
Amazon (AMZN)
Moving on to other stocks, Amazon also cleared some resistance and is likely on its way back to $1760.
Facebook (FB)
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
Yields
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
-Mike
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