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Banks, Alphabet, Biogen, Celgene Climb, As Chips Wait On Qualcomm/NXP
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN GOOGL, CELG, AND NXPI
Surely an interesting day, with the market giving back a big chunk of the early gains. The S&P 500 still managed to finish in the green, rising by nearly 50 bps, closing at 2820. If you notice on the intraday chart, the big gap fill over the course of the day.
We can see by days end the gap was filled with the index managing to stage a mini come back. Again, I am still very bullish on the market
Alphabet jumped to a new high around $1250. The stock looks and feels cheap to me give the big growth outlook for earnings, which are forecast to rise by 37 percent in 2018, on revenue growth of 23.5 percent. The stock trades at just 26.50 times next years earnings.
Just be mindful of the gap, we know stocks like to fill those gaps.
Biogen reported solid numbers today and like Alphabet shares gapped higher as well. That makes me 2 for 2 in my earnings prediction thus far this week. A much better start than last quarter that is for sure. I have nothing to add to Biogen except that the beat was on drastically reduced expectations. There was a lot of bad news priced into the stock, and earnings reveal it wasn’t as bad as many anticipated.
Celgene appears to have broken out rising above $87, but remember we should give ourselves a day of strong follow through to confirm. There have been lots of false breakouts across the market, and this one reports results on Thursday morning. I have owned Celgene for a long time, and it has been a significant disappointment. But I happen to think the market has overreacted with this one; good results would massively add fuel to the fire.
Qualcomm/NXP Weighs on Chips
The chip stocks took a beating, look at the opening at $186 closing at $182 on the SOXX. You think this Qualcomm/NXP deal isn’t weighing on the sector. Well, it is. If the deal doesn’t go through tomorrow, then you can pretty much forget about any deals being done in Technology, that have to go through China. We will see, I predicted over the weekend, China would announce the approval at the very last minute. Regardless, I’m quite happy holding on NXP as a standalone. I think of the deal doesn’t get approval Trump will turn up the heat, especially after fixing ZTE.
Skyworks had solid results and good guidance, yet the stock keeps getting hammered. There was nothing materially wrong with that stock or the call that shares should be so weak. But again, the sector just ain’t right at the moment.
Well, the banks continue to actual rise, and I will admit they broke out. I overstayed my welcome. But we had a good run for a while. So we shift. The next level of resistance on the XLF financials ETF may come around $28.40.
JP Morgan has a layer of resistance around the $115 region and then it is off to about the $120 level.
Goldman could be looking to go about $245.
In today’s member video, I previewed Amazon, Qualcomm, and Facebook, showing viewers the exercise I do to get a sense of how the market is set up before results using options, charts, and estimates trends. I find it helpful in trying to find the stocks the market is expecting to rise from the ones the market thinks is going to fall.
Check it out, just $20 a month and the first two weeks are free, in case I didn’t tell you already. 🙂
Articles Written By Mike On Investopedia:
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.