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July 19 – Stock Mentions: XBI, SPY, MSFT, JD, BABA, MU, SQ
Michael Kramer and the clients of Mott Capital own MSFT
- S&P 500 Futures +5 points
- US 10Yr 2.05%
- Oil $56.08
- VIX 13.50
- Dollar Index 97
- Japan Nikkei +2%
- Hong Kong +1.07%
- Shanghai +0.79%
- KOSPI +1.35%
- UK +0.10%
- DAX +0.07%
The Focus of The Week Exclusive For Investing.com:
The S&P Biotechnology Select Industry Index has fallen by around 1.5% in July, underperforming the broader S&P 500’s gain of over 1.5%. Drug prices have once again become a political topic as the U.S. 2020 Presidential Election comes into focus, weighing down hard on the sector. Read More
US Trading for July 19
S&P 500 (SPY)
The S&P 500 futures are trading higher on July 19, pointing to an opening that will have us challenge resistance at 3,000. It is important for us to move well beyond this 3,000 level. I talked about the reason I felt that way over the weekend. This morning I read an article that noted the S&P 500 could fall by as much 10%, with one reason stated, the tough technical resistance region around 3,000.
If we can manage to move and close the week above 3,000 it would be a positive sign. If we can’t then we need to think about that drop to 2,940 or even 2,915.
Microsoft got a slew of upgrades and price target raises following the strong results. After taking the time to re-read the numbers and the conference call, I was impressed that a company of this size can grow this rapidly. Things for Microsoft seem to be going in their favor. I strongly encourage you to read the call.
Consider that the stock trades at 23.9 times fiscal 2021 earnings estimates of $5.88, which are likely to rise. Why couldn’t MSFT trade with a 26 to 28 multiple, when stocks like ADBE and INTU trade 30+? In my opinion, this the cleanest play on cloud growth, better than Amazon.
The $140 region is sill acting as strong resistance though, so a post-earnings pullback certainly seems possible, before an eventual move higher.
Alibaba has been consolidating nicely, and could finally be getting ready for that push to $182.
JD.com is starting to look like a flag pattern, and perhaps that finally push the stock higher to $34. It isn’t like I haven’t seen enough call buying in this stock recently, which I have. More Bullish Betting On JD
Micron is very close a big break out at $45.50. It could be setting up an increase to $54.
Square continues to consolidate nicely around $81 to $83. It is looking more and more like a move to $92 is becoming possible.
Have a great day.
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.