JANUARY 19, 2020

STOCKS: NFLX, INTC, SWKS, PG, BB, DIS

MACRO: SPY

MICHAEL KRAMER AND THE CLIENT OF MOTT CAPITAL OWN NFLX SWKS, AND DIS

It will be a holiday-shortened trading week with the markets closed on Monday, and reopening on Tuesday. It will be a significantly slower week in terms of economics, but a considerably busier week in terms of earnings.

S&P 500 (SPY)

The S&P 500 continues to rocket higher, and after two weeks of strong returns, I do expect the index to pull back some, again a minor amount. Perhaps with the S&P 500 falling to around 3,250, or at the most to around 3,215. Nothing too dramatic, at least that is what I want, I’m not too fond of markets or stocks that go up in a straight line.  — The week ahead premium content – Earnings Will Be Dominant The Week Of January 21

Netflix (NFLX) 

Netflix will report results on Tuesday, and analysts have been talking this one up now for a couple of weeks, with most seeming to think the company will report inline or slightly better subscriber results. The search trends for the term Netflix appears to have been very strong in the US in the fourth quarter, which is unusual, given its historical trends. Perhaps it means better than expect domestic subscribers for the quarter.

The stock has been stuck around this $340 for what feels like forever. All of the trends suggest the stock rises and fills the gap at $360. But then again, I have been saying that for what feels like forever too.

Intel (INTC) 

Intel will report results on Thursday, and I have been seeing a lot of options buying at the September $75 calls since the start of the year. I have been writing about for about two weeks now in the member area. Perhaps it means the stock jumps after results. We will see, resistance on the stock comes around $64 should it finally break out and rise above $60. Member content highlighting the call buying- Betting Suggests Intel’s Stock Makes A Big Jump, Intel’s Calls Buyers Are Back, Rapid Update On Intel

Skyworks (SWKS)

Skyworks will report results on Thursday too, and the strange thing here is that results are about 2-weeks earlier than last year, and they come ahead of Apple, which is even weirder. The previous time the company reported results this early and ahead of Apple was during January 2017. That was when the company reported strong results, and well, the stock went a lot higher. Does it mean anything, I guess we can find out. 

P&G (PG)

Procter & Gamble will report results this week, too, but on Thursday morning. The chart looks pretty bullish, with shares rising nicely in a rising channel and challenging resistance around $126. It sets up that potential move higher towards $135. 

Blackberry appears to be continuing its trend higher, and it looks like the stock can continue to move towards filling that gap.

Disney (DIS) 

I saw some bullish options betting in the Disney $145 calls for expiration on February 21. The calls traded on the ASK, and that means they were bought for a price of $4.15 on January 16. It means the stock would need to increase to over $149.15 by the expiration date for the trader to earn a profit. It would allow the buyer of the calls to capture the earnings release date on February 4. It was a nice size bet too, with the open interest rising by nearly 4,900 contracts and dollar value of just over $2 million. Typically, this type of thing information is reserved for premium subscribers, but I’m sharing it with everyone today, why not. Don’t forget you can sign up on Seeking Alpha or StockTwits, and get the first two weeks for free. If you like it, great. It you hate it, cancel. It really is that easy.

The chart also suggests the stock rise, too, with what appears to be a flag pattern or symmetrical triangle. I’m thinking it is starting to look more like a flag, and that would suggest the stock rise to around $157.

Have great Sunday

-Mike

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.