Nvidia Crushes It, Amazon Nears Breakout, As Roku Fades
Michael Kramer and the Clients of Mott Capital Own AAPL, NFLX, and GOOGL
We got the follow through I was speaking of last night, with another strong day in the broader S&P 500 which managed to finish higher by about 1 percent. The key thing, we closed at 2723, and that took us above the highs from mid-April of 2715. Not to get too granular, but the next region of resistance is around 2750, then 2800. I still think we are well on our way to 2,800.
Once again, we got another strong day out of the Technology ETF with the XLK rising to just about $70. I’m wondering now if we aren’t on a path to around $75 on the XLK. Some of the larger technology stocks in the ETF are cheap enough to push the price up to those levels. Apple, Facebook, and Alphabet, to name three off the top of my head.
It looks like Microsoft did breakout today. It probably has room to rise to around $101.
The one stock that hasn’t participated much in the recent rally has been Amazon; it has been stuck at resistance now for a few days. I have a feeling that is about to change in the coming days, maybe even tomorrow.
The reason I say that? Just look at the consumer ETF XLY, if that chart doesn’t scream of a potential breakout, then I don’t know what does. The ETF is going nowhere without Amazon, with its massive 22 percent weighting.
This chart in the energy XLE ETF is the strangest thing I have ever seen, and I can’t make heads or tails of what it means. The problem with the XLE ETF is that Exxon has a 22 percent weight, and Chevron is at 17.25 percent. There are probably better ways to play the energy sector.
Financials are also finding a nice bounce here.
The excitement in Roku quickly faded by mid-day, and you can see the stock got to resistance and caved in. Look, I told you what I thought of Roku’s numbers last night. I don’t think they were as strong as everyone first thought. I’m sorry, show me that ARPU in 6 months, when it is coming off that tiny base of active accounts.
Nvidia posted some fantastic results. I really would like to know how they do it! Revenue growth of 66 percent since last year. Data center growth up 70 percent to $701 million! These were huge numbers. Guidance was better than expected, margin improvement. I didn’t hear the call but read the notes, and I can’t find anything wrong at this point. I’d be shocked if the stock is down tomorrow.
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