This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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Michael Kramer and the clients of Mott Capital own NFLX, GOOGL, ACAD
They’re baaaack! FANG had a big day today, and you can thank Netflix for stoking the fire. The company announced a price increase for its U.S. services. It took the FANG complex up. As a result, the stock market managed to post a solid day of gains, with the S&P 500 rising 1% to 2,610. The NASDAQ had a solid day rising nearly 1.7% to 7,022.
Brexit, What About It?
How vital is FANG to the market? Very. How do we know? Today, of course, was the Brexit vote and it was a historical lose for PM May. She lost by 230 votes Brexit, one of the most massive landslides in UK history! What happens next? I have no idea.
Stocks dipped briefly, but then snapped right back. A month ago, a Brexit vote went south, and the market tanked. Has the mindset of investors changed? Absolutely.
S&P 500 (SPY)
The S&P 500 now appears to be on pace to rise to 2,630, a level we have been patiently been waiting for over the past couple of weeks. Additionally, the index appears to be crossing above the downtrend which formed at the beginning of October.
The NASDAQ also broke one of its downtrends, with one more to go. A jump above 7,026 and the index can go on to rise to around 7,125.
The big news came from Netflix when the company said it would raise prices in the US. The stock jumped about 6.5%. I can’t imagine that Netflix would raise prices just two days ahead of earnings if Subscriber growth in the fourth quarter were weak. Trends have been hot! The next level of resistance comes around $380.
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If it happens, that means that Netflix would have added nearly 10 million subscribers in the fourth quarter. Crazy.
I have often argued that Netflix could raise the price of the service to $25 a month, and people would gladly pay. Go to the movie it cost $15.50 where I live, to see one movie, one time. On Netflix, hate the movie? No problem find something new. Go to the theatre to see the film, hate it, leave unhappy. Oh, and you have spent about $35 for two people to go.
Go with your kids, and it comes in closer to $100 when you factor in popcorn and soft drinks. Plus if you are lucky perhaps the kids will sit through the movie.
Netflix has become engrained in my life. It is my first option to find something to watch. It is my go to at the gym.
My dad got Netflix about three months ago, and now he will call with a sense of urgency when Netflix isn’t working for him. Seriously.
My 4 and 8-year-old daughters are Netflix masters. It is for all age groups.
Netflix has become synonymous with streaming media content.
Amazon appears to be breaking out, after forming what seems to be a flag. A rise above $1,690 sends the stock on towards $1,770.
Alphabet is also nearing a big break out too. The downtrend is within reach, and should it rise above $1,090 the stock is likely going higher towards $1,170.
Facebook is also nearing a breakout and could be on its way to $158. Read my latest free article – Facebook: When Bears Turn To Bulls
JP Morgan (JPM)
JP Morgan managed to put together a solid day rising by nearly 1%. But don’t get excited. Look at where this stock failed. Right at resistance around $102.60. Ouch!
Citigroup got right to our target of around $61, reaching the downtrend. The RSI is overbought now, and I expect a bit of a pullback over the coming days.
Acadia popped above $21 again, and if can hold $21, I still think it goes to $24. Nothing new here.
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 results