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.
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, ACAD, ALKS
Here we go, are you ready? This week is sure to be full of back and forth stock action. I thought today we could just run through a bunch of tickers. So let’s start.
Apple reports this week and no stock may be more critical. This is easily the largest company by market cap and what this company says impacts the nearly the entire semiconductor sector, and that group has been absolutely destroyed. The company reports results on November 1 after the close.
As we have identified there is a huge buyer of this stock around the $215 level. The RSI suggests bullish momentum is still going in the stock’s favor. What’s the saying be greedy when others are fearful, and fearful when others are greedy?
Facebooks stock has been horrendous, and I think may see a bounce following results back to resistance around $155.
Amazon is the opposite of Apple, and its RSI shows that momentum is leaving the stock. Additionally, one should be extremely cautious with this stock until its settle out, which may be weeks. Let Facebook be your guide. Seriously, I know, but the company beat earnings. Here’s a hint, the market cares about revenue and revenue growth, not Amazon’s earnings. Right now the market sees a stock that missed revenue estimates two quarters in a row and issued guidance that was lower than expected for the fourth quarter. Now perhaps the company is downplaying fourth quarter guidance. But remember the third quarter also had Prime day and the company still missed revenue. $1450 is a very real possibility.
I have concerns about Microsoft. I know it had a great quarter, but I can’t get over that new downtrend which has formed, that the stock is now fallen below the trading channel and that negative sloping RSI. If the stock falls below $102.50, I think the odds of a further decline perhaps to $96 become possible.
JPMorgan is another stock that looks troubled now. Should it fall below $102, a drop to $94 seems plausible.
The pain for Nvidia isn’t over. A drop below $198 sets up a move to $179.
The Trade Desk (TTD)
Someone on Twitter asked me about The Trade Desk. This has to be one of the ugliest charts I have seen in a while. That is just a giant gap that needs to be filled down to $98.50.
Acadia has performed exceptionally well in this down market and has consolidated very nicely around $21.50. It had a very nice up day on Friday in the face of the stocks market sell-off.
Finally, I will mention Alkermes because this may be the biggest week in this company’s recent history. The company will face an FDA advisory panel on November 1, for its depression drug ‘5461. Many investors feel this drug will not get a Yes vote. For the most part the current stock price does not reflect a yes vote either. I have held this stock for more than four years now, and I can tell you that most of the controversy for this drug came after one of the company’s phase III trials called Forward 4 failed, in January of 2016. But the data is very interesting and the chart below shows it all. Week 5 was used to determine the separation for the trial and thus the drugs efficacy. Because Placebo showed an improvement in week 5, the trial failed. But we can also see in week the 6 the placebo stabilized while the separation from the drug widened. One week could have flipped a failed the trails outcome. Additionally, the drug is an opioid modulator, which also blocks its addictive properties. Remember Alkermes is the maker of Vivirtrol, a drug used in the battle against opioid addiction. No company likely has better knowledge about the opiate system, in my opinion.
The breifing documents should be out 2 days prior to the meeting.
The question here is if the management can convince the panel that drug works, is safe, and not addictive.
The chart looks encouraging, with an RSI that has trended higher since January of 2016, when the forward 4 data was first presented. Additionally, that falling wedge may very be a reversal pattern, and should the stock rise, its first level of resistance comes at $52.
Good look this week, we are all going to need it.
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.
S&P 500, SP500, Apple, Amazon, Microsoft, Facebook, Acadia, Nvidia, Alkermes