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SP 500 Continues to Rise, Targets -2,600
The SP 500 continued its rise, confirm the recent breakout, with a retest of support/resistance at 2,550. The index successfully bounced, paving the way for the index to continue its assaultย higher, on to 2,600.
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Netflix ($NFLX)
This week earnings season swings into high gear, and high flying Netflix is set to report results on Monday after the close of trading. Netflix closed just a fraction off of $200 on Friday, and the stock is now up 61 percent in 2017, and nearly 100 percent over the past 52-weeks. During the past 52-weeks, the SP 500 is up only 20 percent by comparison.
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According to Ycharts, revenue consensus estimates are calling for third-quarter revenue to rise by nearly 30 percent y/y to roughly $2.98 billion, and earnings to have increased by 167 percent to $0.32.
NFLX Revenue Estimates for Current Quarter data by YCharts
The Long Straddle option strategy set to expire on October 20, is pricing in an 8 percent move in shares of Netflix using the $200 strike price. That means the shares could rise or fall within a range of $185 to $216. The $200 calls saw volume of 7,300 contracts on Friday, versus only 2,700 contracts traded on the puts. Open interest also favored the calls by a ratio of nearly 9 to 1, with 9,300 open calls, and 1,100 puts.
More Earnings
Goldman Sachs ($GS) will report results on Tuesday, along with Johnson & Johnson ($JNJ). On Thursday, PayPal ($PYPL). On Friday will start off with AMD ($AMD), along with GE ($GE) and Honeywell ($HON).
Nvidia
After struggling for days, Nvidia ($NVDA) shares broke higher,ย rising above $192. The stock had been met with a lotย of resistance at that level, but the Bulls were relentless. Watching the will of the Bulls in Nvidia is something that I have not often observed in my career, it reminds me of the Microsoft, Intel days of the 1990’s and Apple in the late 2000’s. Every time, one would think the stock is due to correct, the Bulls just keep buying. Either Nvidia is one of the next great companies, or its valuation is being stretched on hope. Time will ultimately tell us which was the correct view, but the company will be reporting in the next couple of weeks, which should be a telling sign as the y/y comps now start to become much harder.
I now know how the bears in Tesla must feel. As much I have gotten Tesla right, I have gotten Nvidia wrong. Which makes me realize that perhaps I have missed something. I shall have to go back and reassess my views on Nvidia
Amazon
Amazon broke out above $1,000 once again, and going into its quarterly report; one has to think that momentum will keep to the upside, with a likely run to $1,100 in the works.
Alphabet
Has made an all-time and we can see on the chart, that old high has now become support.
Micron
Micron ($MU) successfully raised $1.2 billion this week, after upsizing an equity offering, and pricing it tight at $41. The stock has had a fantastic 2017, and shares just continue to go.ย What was resistance has now become support, as shown in the chart.
Our Chart of The Week Video: Tesla’s May Rise To $400
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Michael Kramer and the clients of Mott Capital own shares of GE, NFLX, GOOGL
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Mott Capital Management, LLCย 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.ย Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
Tags: Netflix, GE, AMD, AMZN, NFLX, HON, GOOGL, MU
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