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Qorvo, Apple, Tesla, Netflix, Biotech Stocks – The Day In Review

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Qorvo, Apple, Tesla, Netflix, Biotech Stocks – The Day In Review

Mott Capital Management, Michael Kramer

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Well, the stock market did fall,  with the S&P 500 ($SPY) declining by about 1 percent, nothing shocking. But it is down nearly 2 percent in the past two days, again no big deal, considering it is still up by almost 5.5 percent for the month.

The decline is likely not finished yet either, with support hovering around 2,807, which is about another 1 percent lower from the S&P’s current level around 2,822. The good news is the relative strength index has fallen from nearly 87 back to almost 65. Additionally, the VIX continues to rise as well and sits just below 15.

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SP500

Again these are minor things, and with the S&P 500 up nearly 5.5 percent for the month one should feel good about how the stock market has started in 2018.

 

Biotech Stocks

The Nasdaq Biotech ETF fell by 1.75 percent, again the trend is higher for now, and we know there is substantial support around $113.50.  The reason for this decline is the news that JP Morgan, Berkshire Hathaway, and Amazon will provide healthcare services to their employees. What this means for Biotech stocks specifically, I have no idea, nor could the market since there are no specific, as far as I know.

Perhaps it will bring down the prices for drugs, or maybe the drug companies will choose not to sell to the entity, we do not know.  But the market right or wrong always sells first and asks questions later.

Basically, the news gave people a reason to sell.

biotech stocks

Qorvo

It is interesting to see that Apple supplier Qorvo (QRVO) rose by nearly 3.5 percent today, despite another round of Apple iPhone production cut news. Qorvo shares were up almost 10 percent today at one point, on powerful volume.  But interestingly there was no news, so why the sharp rise? Not sure, but I do know the company is due to report fiscal third-quarter results tomorrow after the close.  Is it a coincidence? Not likely.

qorvo

Apple

I’m just going to through this comment out there regarding Apple, and then I would like nothing more but to never discuss the iPhone again. When I looked at Apple’s guidance it shows a couple of things like revenue expectations, gross margins, operating, expenses, other income, and a tax rate. I don’t see anything about expectations for the number of iPhone units being produced, nor do I see it in the conference call transcript. I wonder how all the large number of iPhone unit production estimates are counted with such precision? Are the analysts counting the phones as they leave the warehouses, or counting the delivery trucks?

Plus if Apple were going to have a big miss this quarter, then Apple would have had to prerelease that or give a profit warning, which is the reason why so many analysts have suddenly started saying they don’t see a big miss in these upcoming results.

My final thought, came today as I was walking my dog. Perhaps the iPhone X sales were so strong in Apple’s fiscal first quarter; they simply do not need as many phones now. We just do not know, now do we?

Who knows.

Tesla

I feel like everytime someone leaves Tesla, it has to make the news, why? Do we hear about everytime someone leaves GM or Ford? But Tesla, of course, because Tesla gets headlines. Does the news mean anything, because the market sure doesn’t care, with the stock only down 1 percent, so why is it news?

tesla

Netflix

Netflix is now up 45 percent, for the month, and despite the weakness in the market, Netflix was only down about 2 percent. I would have expected more profit taking than what we had.

The 5-minute chart shows that for now, buyers are willing to step in around $278, what magic that price holds, I’m not sure. But what is impressive is that given the stocks sharp rise, the buyers seem to be taking today’s weakness to soak up any liquidity that comes their way. What is even more impressive is that volume today is fairly robust, and more than the 3-month average. In other words, today’s strength means something.

netflix

That’s enough for today.

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Michael Kramer and the clients of Mott Capital own shares of NFLX, 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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #vix #sp500 #apple #qorvo #netflix #tesla