Micron’s Big Day, Tesla’s Big Breakout, and Roku’s Big Turn

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Micron’s Big Day, Tesla’s Big Breakout, and Roku’s Big Turn

S&P 500

The S&P 500 is back to its old tricks of gap filling and today’s was another such example. The index filled the gap created just yesterday, so now we are back to where we started the week.

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Also, once again the S&P 500 has been unable to rise above our trend line friend “the February 2016-Brexit trend line”, the longest green line on the chart below. The S&P 500 has finally moved into the box we traced out,  what seems like an eternity ago.

S&p 500

Where does the market go from here? Good question. We have said over and over where it is going, but I don’t want to ruin the rest of our 2018 predictions, but I’ll give you a hint, it starts with a 3.

Let’s just enjoy getting this much right,  at least for today.

Micron

We talked about how significant today’s results from Micron ($MU) would be, and it surely did not disappoint. Micron came up big, with revenue and earnings that topped estimates.  Total revenue came in at $6.8 billion, and EPS of $2.45, beating estimates of $6.44 billion and earnings of $2.2. Looking forward to next quarter the company sees EPS in a range of $2.51 to $2.65, vs. estimates of $2.04, with revenue of $6.8 billion to $7.2 billion. Big beat, big raise.

Despite the monster beat and raise shares only rose by about 4.25 percent to $45.85, which could be viewed as a slightly a muted response, considering the size of the beat and raise. It is tough to tell with after-hours trading as we have talked about before. Many of the large institutional investors do not take part in after-hours trading, at least from my experience. Which leaves the after hours to some of the hedge funds and the day traders

If the stock opens tomorrow above $44.75, it would be a breakout, but be mindful of the gap filling pattern that could take place, as the day goes on.

MU micron

Roku

The rise of Roku continues with the stock now trading at nearly $56.50. I’m just not seeing this here; I can’t see how Roku is worth $5.5 billion in market cap value. I just don’t see this as streaming media player, sure it makes the device, but I don’t think the other opportunities are as large as the market things, not from my experience with the device.  But the market, for now, is clearing telling me how wrong I am.

roku

A couple of things in the chart worth noting. First, the stock has risen on decreasing levels of volume. Also, the RSI, is in overbought territory, while trending lower,  despite the overall stock advance.   To diverging indicators, pointing bearishly. Should the stock begin to fall, $48 would likely be the first level of support to watch.

Tesla

Tesla shares fell by about 2 percent today, despite news that UPS was the latest to sign up for the semi-truck ordering 125. The chart below shows the beautiful double formation in Tesla shares, followed by a breakout of the downtrend that saw the stock fall from roughly $390 to $290.  We’ll, see where this goes.

tesla

Biotech

Biotech stocks still can’t break out, and again failed at $107. Frustrating for sure if you are bullish on the group. But for now, there just doesn’t seem to be enough enthusiasm in this group to get a breakout, with the focus shifting to companies that get a tax break. Surely biotech is not that group of stocks.

biotech

Technology

Technology shares saw a slight pullback today; it seemed likely nothing but a fill the gap type of event. As the technology ETF held support after filling the December 18, gap.

technology

That is gonna be it for today.


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Photo Credit Via Flickr

Michael Kramer and the Clients of Mott Capital own shares of  $tsla

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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Tags: #tesla #sp500 #micron #roku #technology #biotech #sectors

 

 

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