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February 1, 2020
STOCKS: AMZN, NFLX, DIS, FB, MSFT, JD, BABA
MACRO – SPY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN NFLX, DIS, AND MSFT
It should be an exciting week when trading begins again on Monday. After all, the Chinese markets will open for the first time in a week, and they are likely to be down a lot. The S&P 500 is down about 3.5% since January 24, while the South Korea Kospi is down over 6%, and the HK Hang Seng is down about 6% too. So could Shanghai be down 7,8,9, or even 10% on Monday, it certainly seems possible.
Regardless the beginning of the week is not likely to be good for the markets. Then layer in the ISM manufacturing data on Monday, the ADP Job Report, ISM- Non, and the BLS job report, and there plenty of things that could pile up quickly.
The number of S&P 500 stocks above their 50 day moving average is still around 47%, and my hunch is that it still has to fall further, probably to about 25%. Premium content – The Week Ahead – Corona, Economics, And Earnings In Focus
S&P 500 (SPY)
For now, 3,150 seems reasonable for the S&P 500 to fall too. It is about 5.5% off the all-time highs and appears to have decent support in that region.
It is only about 2.5% from Friday’s close, so we could see that level by lunchtime on Monday, especially with the speeds these markets move.
Amazon (AMZN)
I’d be careful with Amazon, the stock now has a giant gap to fill, and it is clear as day the market wants $2,060 to be resistance. Watch for a move lower to $1966.
Netflix (NFLX)
Now that nobody is going outside anymore, it seems like a perfect time to sign-up for Netflix and binge some of our favorite shows like Stranger Things or finish off the Irishman. The stock appears to be acting pretty well. The stock hardly budge this last week, I think it will continue to hold $340, but I already told you that. Premium content – Why Netflix Stock May Have Bottomed
Disney (DIS)
The same thing may apply to Disney with its streaming service. Then again, they do have those theme parks. But actually, they have a minority interest in Disney Shanghai and Hong Kong, did you know that? Anyway, I noted some bullish option betting in Disney last week, and I saw it again this week. The stock held up pretty well on Friday despite the selling in the market. Probably bodes well for the post-earnings report, with shares rising back to $150. Premium content- DISNEY STILL SEEING BULLISH BETTING
Alibaba (BABA)
It is not likely a good week for Alibaba, just because it will likely serve as a proxy for China. A break below $201 probably moves this one lower to $187.
JD.com (JD)
The same can probably be said for JD.com, with shares likely heading back to $36.40.
Facebook (FB)
Facebook fell through support at $203, and I think that sets up that drop to $191.
Microsoft (MSFT)
Microsoft has come a long way in recent weeks, and I think the stock could fall back to around $165.
Have a 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.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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