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Apple and The Suppliers
At first, there was no demand; now there is too much demand. This is why you just have to love the stock market. According to reports, Apple ($AAPL) iPhone X pre-orders could hit 50 million. The result, Apple’s stock surged over 2 percent hitting a new all-time high. It wasn’t just Apple; those Apple suppliers got a boost too, Skyworks ($SWKS), Broadcom ($AVGO), and Qrovo ($QRVO) with all three jumping by more than 3 percent.
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AAPL Price data by YCharts
Unfortunately, this what makes investing so hard, rumors fly around, and stock move on a whim, but until verified it just a tale. Just look at some of the volatility in these stocks over the past few weeks.
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Skyworks is now basically kissing it’s all-time and likely to break out. It is due to report results on November 3, after Apple.
Broadcom is the same boat as Skyworks, and the chart looks pretty much the same, recently. Broadcom likely won’t report till sometime in December.
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Facebook consensus estimates are calling for the company to report that third-quarter revenue grew by 40 percent since last year, to $9.844 billion, while EPS is expected to have increased 17.5 percent to $1.28. The important measurement for Facebook, the number of active users, and average revenue per user. The November 17, long straddle options strategy is pricing a move of 6 percent for Facebook, based on the cost $10 to buy one call and one put.
The chart looks very strong as well, with the stock breaking out on Friday. Could strong result be enough to carry Facebook to $200? Perhaps.
Tesla
Surprisingly or not, options in Tesla are pricing in about 9.5 percent in the shares of the stock, using the November 17 long straddle. Wall Street is expecting revenue for the third quarter of $2.928 billion, and loss of $2.81. Of course, cash burn will be of the most significant importance as well, Tesla had cash and equivalents of nearly $3.0 billion. Which for any typical company is a lot, but for Tesla, one never knows. Capex has now gone expotential.
Tesla’s stock continues to hug the 200 day moving average, which has to be encouraging for the bulls.
Biotech
For now, the biotech group as measured by Nasdaq Biotech ETF ($IBB) looks to have found a short-term bottom. We are going to want to see the ETF retake $322.
Back tomorrow
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Michael Kramer and the clients of Mott Capital own shares of TSLA, SWKS
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.
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Charts used with the permission of Bloomberg Finance L.P. 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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