This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary and join the 1,607 subscribers getting it for FREE every day!
8 Stocks To Watch For The Week of May 21
michael kramer and the clients of mott capital own shares of Aapl, googl, and Netflix
I have been writing the past few days about the moves in semis, biotech, and the small caps, but I thought today we could focus on the large caps, because eventually for the S&P 500 to continue its rise, the large caps are going to have to get involved.
It would seem relatively easy to say that Apple has been hands down the best performer in May rising by nearly 13 percent, followed by Facebook, up half as much, increasing by about 6.5 percent. Alphabet is up about 5 percent, while Netflix and Intel are both up about 3.5 percent.
How much higher can Apple rise, hard to say based on the charts. I never like to try to predict how high a stock can rise when it has broken to new highs; it becomes a guessing game for the most part.
But it is among the cheapest of the large-cap stocks based on a one-year forward PE earnings multiple around 14.1, while the group has an average of a one-year forward pe ratio of roughly 18.5, with a median of 16.5.
Shares are also trading at the upper end of its historical earnings multiple range, so it would suggest there is likely further room for Apple stock to rise. However, that rise may be limited from here over the next quarter until we start getting details on the upcoming iPhone launch or better visibility into next year’s estimates.
Amazon’s stock has been stuck right below its previous highs and has thus far been denied what could be a massive breakout. I thought it would have happened this past week, but the market had its thoughts on the matter. But it is quite clear that the RSI is still trending lower, and the volume has been tailing off in the recent days. So, does the declining volume mean the sellers are waning, or the buyers? Tough to tell with no clear stock price direction in place. If the stock doesn’t break out this week, then I’m beginning to think we retrace to around pre-earning levels of $1500, and it is clear the buyers are the ones that are fading.
Analysts have gotten more bullish on Amazon as well, upping their earnings estimates for the year by a stunning 48.3 percent to $12.83 per share over the past month. But everyone knows when it comes to EPS, those numbers are BS because Amazon does what it wants when it comes to profitability. Revenue estimates have only climbed by 1.57 percent to an amazing $237.26 billion, a growth rate, of get this, 33.4 percent! That is absolutely a fantastic amount of growth given the size of the revenue base.
Alphabet has a rising RSI, and that is a positive sign momentum is still building in the stock. In fact, even Friday’s price action is a positive for the future direction. Volume has also remained relatively consistent. I still see this one rising to $1175. Plus, analysts have upped their earnings and revenue estimates for the balance of the year, by 4.5 percent and 1 percent respectively. So again, it suggests positive investor and analyst’s momentum.
Intel continues to grind higher, and momentum appears to be higher as well.
Analysts have upped their eps estimates by about 7.6 percent to $3.85 per share while raising revenue estimates by 3.9 percent to $67.6 billion. The setup and the momentum continue to be strong.
It had looked like JP Morgan shares broke out, and while it may merely be the way I drew out the trendline, but it appears the breakout is in jeopardy. Volume levels have been steadily dropping, but the RSI is trending higher, and if the stock can find a bounce early in the week than perhaps momentum can continue higher.
Boeing shares appear to have broken out and can increase back to $370 could be in order.
Microsoft has broken out as well and appears headed higher.
Finally, Netflix looks like it may be getting to breakout.
Good Luck this week
Free Articles Written By Mike:
Join our 1,607 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe
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.
© 2018 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.
Tags: #stockmarket #may21 #largecap #apple #microsoft #alphabet #microsoft #boeing #jpmorgan #netflix #amazon