July 17 – Stock mentions: SPY, SMH, NFLX, AMD, BAC, AMZN, SQ

Michael Kramer and the clients of Mott Capital own NFLX

US Markets

• S&P 500 Futures +3.5 points
• US 10 Year 2.1%
• Dollar Index 97.35
• VIX 12.69
• Oil $58.05

International Markets

• Shanghai Composite -0.2%
• Hong Kong HSI -0.09%
• KOSPI -0.91%
• Nikkei -0.31%
• Germany DAX +0.03%
• UK FTSE -0.06%

US Trading for July 17

S&P 500 (SPY)

The S&P 500 is pointing to a slightly higher opening on July 17. Not much has changed since the last time I checked in with you. We are pretty close to finding out if the index is going to reverse lower, potentially as early as today. Should it break down, the first level of support would come at 2,975. Meanwhile, should it continue to rise, the next level of resistance comes at around 3,030.

The wedge seems like it is still middle innings, so I think we may be able to squeeze out some higher prices before a mild retracement. But what happens at support at 3,000 will tell us a lot on July 17.  Premium content: Second Quarter Mott Capital Investor Letter

Semis (SMH)

ASML Holdings is rising today by over 5% after reporting better than expected earnings. It should help to lift the Semis sector. The SMH is testing resistance today at $114.60.

Netflix (NFLX)

Netflix will report results today after the close. The options that expire this Friday suggesting the stock rise or fall by 7% following the results. It places the stock in a trading range between $342 and $393.

For now, the stock has held support at $362, and I have been looking for the stock to rise to $405. I do think that the company will report better than expected subscriber net additions, and give strong guidance. I’m fearful that it may not be enough for the stock to rise, as investors have started focusing more on Free Cash Flow.

However, my hunch given the price hikes, we see better than expected revenue and EPS. We’ll see.

AMD (AMD)

AMD has that nice rising triangle, and it would suggest we see that rise above $34.50, potentially today.

Amazon (AMZN)

Amazon is getting ready to make it next move up as the wedge contracts. The next level of resistance is likely around $2,060.

Bank of America (BAC)

The market at this point seems less than impressed with Bank of America’s earnings results. Shares could drop to $28.

Square (SQ)

I’m torn some on Square; it isn’t clear to me yet what happens next. That’s because the chart is creating an ascending triangle. However, there is a risk that the stock first falls to the uptrend at roughly $78 first. We will need to continue to watch closely.  However, a break out above $83 sends the stock to $92.

Have a great day!

-Mike