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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, NFLX, NXPI, SWKS
The stock market continued its climb today. We sure did not get the gap-fill pull back I had been hoping to see. Which is ok, but I would have preferred to see the pullback. It tells me one of two things, we are setting ourselves up for a more significant pullback in the coming days or weeks, or the buying activity is far stronger than I previously thought.
The next level of resistance on the S&P 500 comes around 2,752.
Semiconductors (SMH, SOXX)
I do have some ideas regarding the current scenario in the market, and I think much of it lies within the semiconductor group. The SMH was up by 5% on the day, a significant rise. I think most of this can be attributed to NXP Semiconductors results. The company delivered better than estimated earnings and revenue, and in a lot of ways, it confirmed that much of the markets worst fears might have been overblown. Mind you this stock is 40% off its highs. So the whole group has gone wildly higher.
The SMH ETF has room to run higher to potential $101. Of course, I sold my options earlier today, still making a handsome profit, but leaving money on the table.
I think that NXP has room to rise back to $95.
Skyworks also has seen a nice bounce off support at the $81 and may now be looking for a rise towards $93. It reports results next week.
Micron has gone wild, and I think we could see a rise to the next resistance level at $42.25.
Amazon has seen a big break out as well, rising above $1620, while also breaking a downtrend. It appears to be on its way to $1750.
Netflix has also broken out and may very well be on its way back to $333.
The big one today was Apple’s results, and as we have identified the big buyer in the stock around the $215 level. Amazingly, the stock is trading right around there post results, as of 5PM
The quarterly results look solid, but the guidance was a bit light, and that is causing the stock to fall a bit. But when you look at the iPhone sales growth, it was up a strong 29%. Service revenue grew by 17%, which is a good amount of growth. Again, nothing that was disappointing to me in the least. Remember the new phones weren’t released until around September 20th, so there were a whole ten days in the quarter.
After hours trading is never a good indication, and to be honest, there hasn’t even been a conference call yet. We know the stock is stable in the $209 to $215 range, and it is unlikely these results change that at this point. Plus Apple will soon be back in the market repurchasing its stock.
Tomorrow is the big jobs number, but obviously, the wage numbers are the ones to pay attention too. The consensus is for 190k, and an unemployment rate of 3.7%. But the big number is average hourly earnings and estimates are for 3.1 y/y.
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.
S&P 500, SP500, amazon, micron, netflix, nxpi, semiconductors, skyworks