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Bitcoin, AMD, Nvidia, Biotech, Could Apple iPhone Worries Be Overblown
It is a new year, and with that everything gets reset back to zero, but other than not much else should change when trading opens again on January 2.
Bitcoin
It seems likely Bitcoin will continue its decline as well. In an Investopedia article on December 27, I wrote that Bitcoin could fall by as much as 50 percent, from its price of about 15,000, taking the cryptocurrency to nearly 7,700. With Bitcoin now is trading around 13,300, it seems there is still more downside risk.
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The Chart below shows how Bitcoin’s Relative Strength Index (RSI) is still far from oversold levels. The RSI is now around 46 and would need to fall below 30 before it was oversold. Meanwhile, the next significant level of resistance comes at roughly 11,800, and from there it is a long way down to around 7,700.
btc by Scorpio244 on TradingView.com
Nvidia and AMD Fallout
Nvidia and AMD will sometimes see their stock price get pushed around by the rise and fall of Bitcoin. It doesn’t matter whether GPU’s from AMD or Nvidia get used to mine Bitcoin or other cryptocurrencies, they are guilty by association because most investors aren’t going to have that type technical sophistication, so just keep that mind. y
In reality, as I have written about in the past, Nvidia’s total revenue from cryptocurrency mining was about 2 percent in the latest quarter, while AMD has started downplaying cryptocurrency trends in its business as well. In fact, AMD was down nearly 10 percent in 2017; the stock market never gave AMD any credit for Bitcoin when it was rising, so why should it when Bitcoin is falling.
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Tesla
Tesla Model 3’s are getting delivered, and you can now even buy one on eBay! In fact, you can also buy one now for $77,000! Or this one for $85,000!
Biotech
Remember the JP Morgan Healthcare Conference kicks-off on January 8, and there usually plenty of big announcements that come out of this conference, with more than 400 companies presenting. So make sure you are paying attention.
The Biotech ETF ($IBB) managed to stay in the zone of support, between $106.50 and $107. The biotech stocks should be able to hold this area of support and rally off it come next week.
IBB by Scorpio244 on TradingView.com
Celgene has been able to test support now on a few occasions at $102.5, and to this point has held.
celg by Scorpio244 on TradingView.com
Biogen has been able to hold support at $319.
biib by Scorpio244 on TradingView.com
Gilead is the real question mark in the group. After looking like it made a significant multi-year breakout back in July, and the big Kite acquisition in late summer, the stock has struggled. It seems to have found two level of support around $71.75.
gild by Scorpio244 on TradingView.com
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Apple
The focus has come back to Apple and the supply chain again, as investors once again worry about iPhone demand. It is ridiculous that these rumors come up so often. This is what the third or fourth time now? Now the rumors are pointing 30 million units for the first quarter. I have no clue, what this number will be, but we can make an educated guess about how Apple may fare.
Broadcom is a major supplier to Apple and it reported it fiscal fourth quarter 2017 results back on December 6, for the period ended October 29, 2017. The company provided guidance for the fiscal first quarter of 2018, ending on February 4. The company gave strong guidance of $5.3 billion at the mid-point, about 11 percent higher than previous estimates.
AVGO Revenue Estimates for Current Quarter data by YCharts
In its 10-K, Broadcom said it believes that Apple accounted for more than 20 percent of revenue in 2017, up from 15 percent in 2016.
Broadcom’s Fiscal First quarter ends on February 4, 2018, running through nearly the middle of the calendar first quarter. If Apple iPhone shipments in the first quarter are to drop from say 50 million units to 30 million units, why would Broadcom issues such strong guidance? Will there be a huge drop off in business in the second half of February and March for Apple? Perhaps. But it is just one other way to assess the situation and think outside of the box and think about all the possibilities.
Good Luck!
On-Demand Premium Content
In my premium video, I run through how the different sectors set up and where the ETF’s might rise or fall too. The video is about nine minutes long and I run through many charts, pulling a lot of pieces into the video for the start of 2018. It an instructional video, so you will see exactly what I’m looking at.Â
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Tags: #bitcoin #nvidia #amd #apple #broadcom #iphone #x #tesla #model #biotech #celgene #gilead #biogen
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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.