For the week of Sept 23 – Stock mentions: MU, ROKU, NFLX, ACAD, CSCO, BB, DIS, FB
Michael Kramer and the clients of Mott Capital own ACAD, CSCO, DIS, NFLX
This past week was like the week from hell for me. My wife recently got a promotion for her job, and she had to go away for training. To say I struggled to survive the week was an understatement.
Putting girls hair into a ponytail is not easy, especially when it is curly. Plus I locked myself out of the house on Tuesday morning when my key snapped in half. Add to that, my 11-month old 85lbs Golden Retrieve decided to PEE all over the bathroom as my kids were brushing their teeth to finish the week on Friday morning, before school! So glad the week is over.
Being that I had a few minutes to focus, I realized that the blog now has over 1,900 people getting it twice a day via email and another 840 getting it on push notifications! Unreal.
Thank you all for your loyal support. The fantastic thing is that every day my emails are still being opened by 25% to 30% of the readership base. I guess you care about what I write.
Compelling and humbling stuff.
Moving on then…
It will be a relatively uneventful week from an economic and central bank standpoint. The only significant headlines will center around some flash PMI readings. However, one significant point of interest will likely come on September 26 when Micron reports its fiscal fourth quarter results.
Analysts are looking for the company to say that earnings for the fourth quarter fell by 86% to just $0.48; meanwhile, revenue is expected to have declined by 46% to $4.55 billion. Premium Content: Micron Will Be The Key To The Week Of September 22– Get the First Two Weeks Free
I had been looking for the stock to rise to around $54 in recent weeks. To this point, I think that may still be possible. The shares have found a meaningful level of technical support at $48.75 this past week. The trend has been mostly higher, but there does appear to a rising wedge forming in the chart, and that may be an indication that a reversal may be coming following the results. We will have to monitor during the week. The region around $54 may be the top for the short-to-medium term.
Roku is another stock I know everyone is asking about. I have been saying for months this is a speculative stock. The momentum has broken, and you can see what has happened. The valuation is entirely out of whack and without any reality. I went through my analysis in a free write-up I did for Investing.com that was published late Thursday night. Roku’s Big Advance May Finally Be Over
The stock has filled the gap at $100. As I noted in a video segment on Friday, I do think that gap at $60 is scary, and should not forget about. The real test comes early this week because I believe it will rebound to back to $122. If the stock fails to advance past that $122 region than I think $60 become a genuine possibility. Sorry. Premium content on SA Market Place: Market Showing Cracks, Plus Netflix And Roku – Try the first two weeks for free, go ahead, cancel if you hate it, see if I care. 🙂
Netflix continues to have problems and has not worked out the way I thought it would, to my disappointment. I’m feeling uncertain about what happens next. The perception of increasing competition has taken hold. It will take a solid quarter along with strong guidance from the company for the fourth quarter to break that perception.
Evercore ISI noted that international App downloads have only grown by 5% in September y-o-y vs. growth of 21% in July and August. Let’s keep in mind the company added about 6.1 million paid subs in the third quarter last year, with 5 million coming from International. Meanwhile, Netflix is forecasting total paid subscriber growth of 7 million in the third quarter this year. Plus this report only notes app downloads on Google and Apple. Hard to say how many new sign-ups come from Roku and other streaming devices.
I’m not sure where the stock goes from here, to be honest. I’m confused by the chart, and the falling wedge to this point has proven to be completely wrong. The only pattern that I can now trace out appears to be a bear flag or pennant. But this pattern has only come after the fact.
At this point, one must think that there is a chance for a retest of the December lows. The stock will need to retake $284 to avoid this scenario.
Well, the Bakers now own about 41 million shares of Acadia or 27% of the company. The company is due to release some data at two upcoming conference, one this weekend.
The stock has traded reasonably well following the secondary. It has struggled around resistance at $42. That price remains the high hurdle mark for now.
Cisco has acted well recently, holding on to support around $49 for some time. We can see that the RSI has been trending higher off of oversold levels, and I think that will help to push the shares higher and back over $51.
Blackberry has been consolidating nicely around the downtrend and is getting smushed between that downtrend and support at $7.50. It will have to break out this week or will face a pretty steep reversal lower.
Disney’s is fighting for its life at $132. The chart is starting to look like a head and shoulders, which means it could be finding itself moving lower towards that gap at $121.50. A pullback won’t be the worst thing in the world; the stock still has much further to climb.
I noted in a premium write-up this week that I thought Facebook was breaking out, and that some bullish options bets would lift the stock. We will see. You can get your a free two trial when you sign-up, cancel if you don’t like it, I won’t cry. :). Premium content: Facebook May Be Breaking Out
The SA Market Place section has grown, up to 100 members now. All they do is chat all day with each other about trading and stocks. It is fun to watch.
Have a great weekend! I’m taking Sunday off.
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