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11.30.20
Stocks – ZM, ROKU, AMD, PYPL, AVGO
Macro – SPY
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- Tesla’s Valuation Is Steep, Still Some Think It Has Further To Rise
- Stocks Stuck In Neutral As AMD Surges
- Zoom Earnings, And The Need For Data Analytics – Morning 11.30.20
- One More Push Higher – The Week Ahead 11.30.20
- Morning 11.27.20 – QQQ, TSLA, AMD, SAGE, ZM, SPY, VIX, BTCUSD, GLD
- Stocks Still Look Toppy
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks finished mixed on November 30, with the S&P 500 falling by roughly 40 basis points and the QQQ finishing up slightly. Nothing really major developed. Perhaps everyone is waiting for the deluge of data to come this week starting tomorrow, with the ISM manufacturing report, the ADP job report on Wed, the ISM services and jobless claims on Thursday, and the BLS job report on Friday.
S&P 500 (SPY)
Perhaps there is an ascending triangle forming in the S&P 500 chart, hard to tell at the moment. I could always map it another way like a wedge. So we should take another day to be sure.
Zoom (ZM)
Zoom reported better than expected results on the top and bottom and also provided better than expected guidance. Still, the shares are down about 4% as I write this. It had been down as much as 7%. I’m sure there are plenty out there that think Zoom is the future of something. But remember, for stock to justify this valuation, it will need to grow even faster. Yes! The company is guiding revenue to about $2.6 billion this year. With a market of $134 billion, they will have to grow that revenue to around $7 billion over the next 2 or so years to get that P/S ratio down to 20, $14 billion to get it 10. It depends on how you want to value the company. Not sure they are growing fast enough at this pace. Analysts project revenue of just $3.9 billion by 2023. That will likely come up some.
The gap on Zoom is filled; we should continue to move lower now.
AMD (AMD)
AMD moved up today. No big deal, and not unexpected. I said somewhere; I can’t remember where the stock could retrace one last time to retest the previous high. So we will see clearly a bearish divergence on the RSI with the series of lower highs. Not a good sign. The last line of resistance comes at $94; we will see.
PayPal (PYPL)
Meanwhile, PayPal is still range bound and yet to break out or break down. We will see on this one too.
Broadcom (AVGO)
Broadcom has been steadily risen and is bumping against a resistance level I mapped our around $402. They should be reporting results any day now. The stock is nearing overbought levels, but compared to Nvidia, it seems like a bargain. They both have the same growth by acquisition strategy. But Nvidia trades for 45 times next year’s earnings, and Broadcom trades for just 15.5 times next year’s earnings. Yes, Nvidia is “growing” faster, but come on. Nvidia is a great company, just a bad valuation. But hey, if you think Nvidia is the future of everything, more power to ya.
Roku (ROKU)
Finally, Roku was up today. For no reason, I could tell of. Perhaps it is having a bit of convexity squeeze here, it is the only thing that explains the movement. You know what is even better than watching Netflix with your Roku player. Watching Netflix with a pair of Airpod pros on your iPhone 12 Max, or iPad pro. Yeah, it is. No distraction, it is just you and the show, and with amazing surround sound to go with. Think about that! TV will be a thing of the past, maybe not tomorrow, but they will be.
-Mike
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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.
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