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OCTOBER 27, 2020
Stocks – AMD, CAT, LLY, EXAS
Macro – SPY
Stocks are rising on October 27, with the S&P 500 ETF trading higher by around 50 bps, making up for some of yesterday’s drop. The best thing that could happen today for the market is an early gap-fill lower after the open and then a steady grind higher for the day’s balance. The S&P 500 will need to reclaim the 3,425 level, while the QQQ ETF will need to reclaim the $282 level. The worst thing that could happen is for the indexes to fail at resistance.
AMD (AMD)
The big news of the day is that AMD pre-announced the quarter and said it would buy Xilinx (XLNX)for around $35 billion. This is an all-stock deal, and I know AMD had a great quarter, but the stock should be down, not up. Currently, the stock is up 2%, but the deal is dilutive to existing shareholders and accounts for nearly 35% of AMD’s market value. The stock should continue to fall, heading towards $75.
Eli Lilly (LLY)
Eli Lilly is trading lower after it reported weaker results. The stock has really broken down the last few weeks and needs to hold onto support at $132.
Caterpillar (CAT)
Caterpillar is getting rocked after it reported weak results. The stock is approaching support at $159, and that needs to hold. Otherwise, $148 is next.
Exact Sciences (EXAS)
Exact Sciences is rising today after it announced it would buy an early cancer detection company for over $2 billion and raised about $870 million through a direct offering to ten institutional investors. The stock is now approaching a big resistance level at $114.50, which is where it could pause for sometime after a huge run-up.
-Have a good one!
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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