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Amazon, Microsoft, Alphabet, Netflix Heading Highers, as Banks Plunge - The Week of June 18

Amazon, Microsoft, Alphabet, Netflix Heading Higher, as Banks Plunge – The Week of June 18



Amazon, Microsoft, Alphabet, Netflix Heading Higher, as Banks Plunge – The Week of June 18

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX and googl
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The Week of June 18

The stock market rally will likely continue the week of June 18. The setup in the charts is still overly bullish for the S&P 500, as the relative strength index (RSI) continue to trend higher. My feeling is this week the S&P 500 rises above 2,800 and starts its move on towards 3,000 over the balance of the year. As we have talked about on many occasions earnings growth in 2018 is strong, and to this point, we haven’t seen those earning estimates adjust lower, and that is a good thing.

GDPNow is tracking the second quarter at 4.8 percent, with the next update coming on the 19th.  Additionally, a stronger dollar will help to weaken the Euro and give Europe a much-needed economic boost. But that also means that the price of oil will likely continue to its decline. I suspect we will see that continue this week as well.

spx

Technology

Technology stocks have stalled out over the past few trading sessions, but I suspect they will get into gear this week.

technoloy

Alphabet

Shares of Alphabet are nearing a really big breakout level at 1,172.

google

Microsoft

While Microsoft appears to be looking for a bounce back to the top its trading channel as well.

microsoft

Speaking of Microsoft I saw some really big bullish bets in the stock this week, in the January 2020 $135 calls. It is an aggressive round of buying in these calls considering the length of time till expiration, and considering the strike price is over 30 percent higher than the stocks current price.

Facebook

Facebook stock just continues to work higher along its uptrend, which started at the stocks low in March in April.

Amazon

Amazon’s stock continues to push higher, and I still think this works its way towards $1840.

amazon

Netflix

This is going to sound nuts when I say this, but I thought it was nuts when I said Netflix would rise to about $390 just a few short weeks ago. But the stock could be somewhere around $450 after earnings results. Based on those trends we have been tracking on Google Trends for subscriptions, it doesn’t seem impossible.  We know international growth has been on fire.  I suspect over the next week or so some sell-side analysts will likely start putting out some data which suggest Netflix may beat subscriber estimates, and that may lead to more upgrades like we saw out of Goldman this week.  It could be a case of being too optimistic on my part, but we have seen this same trend over the last few reporting periods.

netflix


Banks

It will be a big week for the banks, with Goldman and Morgan already falling below key support levels, and JP Morgan, Bank of America and Citigroup all sitting on support.

I’m just going to show the chart for BofA because they all look nearly the same.  I think many people look at the chart of these stocks and miss read them. They see the downtrend, and the uptrend, and assume that the banks are going to breakout to the upside. But instead you should be looking at the downtrend and the support level which runs flat at $29.20 on the chart.

We can see that each time the stock has hit that support level since the middle of March it has held, and never retested the long-term uptrend. It would suggest to me the support at $29.20 is the level we need to pay the closest attention to, and that is the pattern the chart is following, which is a falling triangle, and that is bearish. I think that means the banks and Bank of America are all heading lower.

 

bank of america

The 1o-2y treasury spread also hit fresh lows around 35 bps.

spread

Dollar and Oil

Also keep an eye on the dollar index, for a breakout above 95, and oil for breakdown towards $61.

dollar

oil

Good Luck this week

-Mike

Photo Credit via Flickr

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. 

#amazon #microsoft #netflix #alpahbet #banks #jpmorgan #citigroup #bofa #dollar #oil #stocks #week #june18

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Visa, MasterCard, Home Depot, Netflix, Take Two, Activision, Oracle

Visa, MasterCard, Home Depot, Netflix, Take Two, Activision, Oracle



Visa, MasterCard, Home Depot, Netflix, Take-Two, Activision, Oracle

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF VISA, MASTERCARD, AND NETFLIX
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Let’s face it; if we are living in an Amazon, Netflix, e-commerce world, and you can’t use any of those services without a Visa or MasterCard. There is no doubting that as consumers continue to move more and more to a digital world, Visa and MasterCard become more critical. Use ApplePay, you still need  a Visa and MasterCard.  Amazon prime – you guessed it Visa and MasterCard. Costco- Visa only.

Sure you can own American Express, but there you have a company that is also holding the debt of its consumers. Visa and MasterCard, is like going over a bridge, pay the toll and collect the fee. Visa and MasterCard are the toll keepers to the networks.

Visa and MasterCard continue to become a more and more critical part of our daily lives. I have owned both stocks since I started the thematic long-term growth strategy in August of 2014.


MasterCard

Shares of MasterCard keep going up, with the stock breaking out in a big way this past week, and I think it has further to run, perhaps to around $212, based on the chart.

mastercard

Visa

Visa broke out this past week too, and it looks set to keep rising towards $145.

visa

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Home Depot

Home Depot’s stock is back and looks to be ready to climb back to its old highs.

HOME DEPOT

Netflix

Netflix subscription searches are still hot around the world, according to Google Trends with the Philippines and Singapore performing strong. I have owned this own since August of 2016. 


Oracle

Oracle is starting to show some positive momentum, and they have results coming on the 19th. The chart is looking reasonably healthy, and the RSI is rising nicely. I will do an earnings preview next week. But the chart would suggest a rise back to $52.

orcale

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E-Gaming

I still haven’t made up my mind whether e-gaming leagues are the next big thing or just a fad. I keep going back and forth on the topic. But the gaming stocks are hot and look to get even hotter.

Take- Two

There is  a bullish pattern in Take-Two

take two

Activision

and Activision

activision

Sorry for the quick run down, but I have a lot to do. Unfortunately, I work on the weekends too. Although my backlog is not the size of Boeing’s, I’m a one-person show, and my kids are too young to read and write! 🙂

That’s it!

-Mike


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-Mike

Photo credit via Flickr

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. 

#netflix #amazon #visa #mastercard #activision #taketwo #oracle #homedepot

Netflix, Amazon, Facebook, AMD, Intel, Skyworks, and Gilead

Netflix, Amazon, Facebook, AMD, Intel, Skyworks, and Gilead



Netflix, Amazon, Facebook, AMD, Intel, Skyworks, and Gilead

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX AND SWKS
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Let’s get into tonight, no long-winded intros, I’m tired and grouchy and want to watch some Netflix before sleep.

Netflix

Speaking of Netflix the stock had a rough day, falling by 1.65 percent, nothing huge, but for now, the stock appears to have some strong support in place around $358.  I like the fact that the stock managed to bounce off that level twice in the day, and the stock closed well off its lows. I have owned this one for a very long time.

netflxi

Amazon

Amazon actually had nearly the same pattern today.

amazn

Facebook

as did Facebook

fb

Maybe there was a FANG Algo running today. Strange? Right!


AMD

One stock chart that looks different was the AMD chart, and maybe it is a case of filling the gap, or perhaps it is the case of a stock that is just merely overbought.  I will tell you there a lot of holes to be filled to the downside, and $13,77 is a genuine possibility.  The stock is up some absurd amount over the past couple of months, and if the stock dropped by 10 percent, it would not be the end of the world.

Relax! I’m not a hater, I’m giving you an opinion, I might even be wrong!  I am wrong from time to time. I hope I am for the sake of the longs!

amd

Intel

Intel has had a big run too, and this chart looks deadly with that rising wedge, and the odds of a stock moving back to $51 are increasing. Does that mean I’m some bear in the stock, and I think it is forever doomed, NO! It means I think it might fall over the next couple of weeks! And should the pattern complete, I shall change my outlook. intel

Skyworks

Skyworks broke out today. I’d love a rise back to $112, especially since I own it!

swks

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Gilead

Lets talk about Gilead.. you what know lets not. But if you own the stock and you can’t figure why the stock has gone anywhere in three years? I will tell you, and it has everything to do with the poor performance of the company. Just look at the at the chart below.

Any questions?

GILD Revenue (TTM) Chart

GILD Revenue (TTM) data by YCharts

That is it. Night!

-Mike


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

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-Mike

Photo credit via Flickr

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. 

#amd #netflix #amazon #tesla #sp500 #apple

Tesla Crushes The Shorts, While Amazon, Netflix, Apple, and AMD Climb



 Tesla Crushes The Shorts, While Amazon, Netflix, Apple, and AMD Climb

michael kramer and the clients of mott capital own shares of tsla, nflx, and aapl
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Stocks Continue To Rise

The S&P 500 continues to rise, and today, the index was up by about 80 bps, closing at 2,772, approaching a significant level of resistance at 2,800. I would imagine the sellers will greet the buyers with a considerable amount of selling pressure on the first such attempt to rise above 2,800.  So, we shall be observing 2,800.

I know how much of victory it must feel to the many who managed to hang in there and not bail out amid the volatility, but one must remember the coast is never clear when investing. Until we rise above 2,800, I will not be satisfied. The sellers will try to test the nerve of the buyers, but this market is not fragile in my opinion, and I do not believe the sellers will prevail.

For me, it is of particular importance because not many were calling for a rise to 2,800 on May 1st when we sat at only 2,640.  And I still think we had to 3,000 later this year.

SP%00


Tesla

Tesla had a big day today, and I noted in an Investopedia article that short-sellers may find themselves in trouble. But even more interesting was the market’s reaction today, and if you think technicals do not matter, the chart below should make you think again. Look at the volume in the chart explode when the price crossed above a strong resistance level at $309, and then explode again around $320. That were buyers coming, or short covering.

tesla

Volume today, was very high, there have only been a few occasions with higher volume in the stock over the past few years, I may be speaking too soon, but I think it may mark a turning point for the stock.

Shareholder Base

Let us remember, nearly 60 percent of the shares held in this stock are controlled by just 7 investors. Elon Musk with 22.5%, T.Rowe with 9.25%, Fidelity at 8.5%, Baillie Gifford 7.5%, Vanguard at 4.2% and Blackrock at 3.6%, and Tencent somewhere just below 5 %. These guys are not in their whipping shares of Tesla around daily.

That leaves about 40 percent of the float trading on any given day and even less than that because we know plenty of other long-term holders, like Ron Baron and such hold shares as well.

So, let’s say on any given day there are 35 percent of the shares are available to trade. How many shares are short? Well, 33 percent of the float! Notice in the chart, that as short positions were increasing the price of the stock was decreasing, that is because the short-sellers were the only ones pushing it down. We already know that 60-65 percent of the holders weren’t selling. Short-sellers borrow shares from the long-term holders, push the shares lower, no problem. But now they want to cover, but from whom will they buy their shares from, good question.

Also notice where the price of the stock was when the short interest started jumping, well most of the shooting took place below the stock’s current price. So, are they losing money? probably!

Where will shares go, I do not know for sure. But I do know that what was resistance at $309, now becomes strong support, and if the shorts are desperate to get out, then the stock is going in one direction. Up!

TSLA Chart

TSLA data by YCharts

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Amazon

Amazon’s continues to rise, after its break out.

amazon

Apple

Apple broke out as well, rising above resistance easily, and now trading at $194.

apple

Netflix

Somebody wanted to get into Netflix badly at the end of the day, enough so that to take the stock up nearly 3 bucks, on good volume no less.

nflx

AMD

Can you believe that AMD was $9.6 at the start of April! Holy Sh*t! Not only that but the rise is coming on strong volume.

amd

JP Morgan

JP Morgan filled the gap, tomorrow will be a good test. Do we continue to rise or revert to the downtrend?

jpmorgan

That’s it!

-Mike


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

Join our 611 Daily Subscribers And Get This FREE Commentary In Your E-Mail! 

 

-Mike

Photo credit via Flickr

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. 

#amd #netflix #amazon #tesla #sp500 #apple

 

Amazon's Stock Nears Big Break Out, While Micron's Stock Gets Crushed

Amazon’s Stock Nears Big Break Out, While Micron’s Stock Gets Crushed



Amazon’s Stock Nears Big Break Out, While Micron’s Stock Gets Crushed

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michael kramer and the clients of mott capital own shares of googl

Stocks continue to churn, with the S&P 500 down about 70 bps today, giving up some the gains from yesterday. But as we noted yesterday, there is a clear rotation going on in the marketplace, because today’s best sectors were Technology and Biotech, while Industrials and Financials struggled. Staples were lower today, and I think this more of a reflection of the imposed tariffs put in place, the likelihood of retaliation from other countries, and the potential impacts on sales and expenses.

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Tectonic Shifts In The Stock Market

Biotech

Biotechs continue to advance with the biotech ETF XBI increased to roughly $95.60,  about $2 beneath its all-time. Amazing. It wasn’t so long ago that the ETF was sitting at $85

biotech chart

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Technology

The technology group is also moving higher, and I decided to redraw the pattern in the chart of the ETF XLK.  It is still a bullish pattern, and I still think the sector continues to rally higher.

technology stocks


Alphabet

Alphabet was one the stocks that jumped today, with shares up almost 3 percent. I think the stock still has further to rise, maybe towards $1,125. A rise above $1,125 would be a significant development and substantial positive for the stock going forward.

alpahebt

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Amazon

Amazon is breaking out, and I do think it likely has substantial room to rise ahead on towards $1850.

amazon


Gilead

Gilead shares also look as though they are consolidating nicely, and it appears to have a flag pattern. It could help share rise towards $72.

gilead


Micron

Micron shares got crushed today after Morgan Stanley downgraded the shares, to equal weight. I didn’t have access to the actual note, but the write-up I read makes the call sound wishy-washy and feels like a downgrade because the stock got to the analyst price target, and the analyst doesn’t feel comfortable raising the price target. That is my take away.

Regardless, shares got hammered because that is what high beta stocks do. But the stock did stop falling around $57.50, which is a positive. The chart doesn’t look too damaged, but that doesn’t mean the selling is done either. The chart is not easy to read at this point, with gaps galore.  It would seem there is explicit support at $54, and unfortunately, $61.50 will now act as resistance.

The thing that can happen, two weeks of sideways trading to consolidate.

micron

That is it! Tomorrow we move into June. Time goes so fast, doesn’t it?


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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: #sp500 #biotech #technology #micron #amazon #gilead #alphabet #staples

10 Indicators To Watch In The Stock Market For The Week of May 28 stock to watch

10 Indicators To Watch In The Stock Market For The Week of May 28



10 Indicators To Watch In The Stock Market For The Week of May 28

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX & AAPL
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The coming week will be a big week when it comes to data, with inflation and jobs data starting on Wednesday. First, we get ADP private jobs data, with consensus looking for 186,000 jobs created in May, and then 1Q GDP comes later that morning with consensus calling for growth of 2.3 percent. Thursday is personal income and outlays, PCE y/y is expected at 2 percent, while PCE Core ex-food and energy is projected at 1.8 percent. Friday is the employment report, with estimates calling for 185,000 jobs created, and average hourly earnings up 2.7 percent y/y.  You can find more at the Bloomberg calendar, a handy tool.

So, we should expect the week to have a little more volatility following the numbers, each day, but this week will most certainly be all about inflation. When you look at core PCE over the course of the last 10-years, we can see that it has been consistently low.

PCE like the other gauges of inflation, like PPI and CPI, tracks extremely closely to the price of Oil. 

By the way in case you are curious you can see the similarity with oil and PCE ex-food and energy, are not as close.

When it comes to the future of inflation and interest rates, we will need to watch the price of oil. Wages should continue to remain contained as well below 3 percent.

So is it possible that we see some huge spike in inflation worries this week, well anything is possible. Is it likely? I have a decade worth of data saying no. Additionally, one must remember that the data is backward looking, and oil is a real-time barometer of inflation, and so if oil continues to fall come Tuesday, then I suspect rates fall with it, regardless of the reports.


Stocks To Watch

The most important stocks to watch this week, Netflix, Amazon, Apple, Micron, Biogen, Microsoft, P&G, and Coke. Yes P&G and Coke! Really. Remember if rates are falling then the staples, which have been crushed, should see a rotation back into the names. The other stocks are leads in the most important risk-on sectors around, Technology, Chips, and Biotech.

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P&G

The chart of P&G is bullish and suggests shares could rise back to $78.20 in the short-term. The relative strength index (RSI) is trending higher and has bottomed out at oversold levels now on two occasions.

PG

Coke

The setup in Coke is quite positive too and looks to be heading back towards to $44.50

coke


Microsoft

Microsoft broke out, and we want to continue to see the stock rise. The relative strength index continues to trend higher as well.

microsoft

Biogen

Biogen has broken out as well, and it could be looking to rise back towards $300.

biogen

Apple

Apple has been consolidating since its post-earnings rally, and a breakout higher from the markets most valuable company, would add to positive sentiment.

apple


Micron

Micron is facing a potentially big breakout. Micron has been one of the hottest stocks around, so we want to see this one continue to stay hot, as it acts as a barometer for the risk appetite of the market.

micron

Amazon

Amazon is knocking on the door of a big breakout too.

amazon

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Netflix

There is no doubting that Netflix is the undisputed champion in the market this year, and there is no stock that is more important. If Netflix continues to rise, then I suspect the rest of the market will soon follow.

netflix

Enjoy the long weekend.

-Mike


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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: #sp500 #inflation #oil #yield #microsoft #apple #netflix #amazon #biogen #micron

The Bull Is Back, Stocks Are About To Break Out! - Daily Rundown

The Bull Is Back, Stocks Are About To Break Out! – Daily Rundown



The Bull Is Back, Stocks Are About To Break Out! – Daily Rundown

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF nFLX
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I know that some people thought earnings wouldn’t save the market, that inflation was going to run rampant, or that yields were going straight to 4 percent on the 10-year. That all these factors were surely going to tank the market, but at the end of the day, the underlying fundamentals do matter and understanding the fundamentals matter even more. Right now, the underlying fundamentals support higher equity prices and lower yields.

In fact, the Fed tipped its hand today, when it said: “a temporary period of inflation modestly above 2 percent would be consistent with the Committee’s symmetric inflation objective.”

That was the big take away from the Fed minutes, and what does that mean? Well, it means that the Fed likely realizes what I have been telling you for months now, once the benefits of rising oil fade, the Fed’s inflation problem will fade too. The Fed is merely buying itself time, to see that indeed is what happens.  What was the market reaction?


Dollar

The dollar reversed right at resistance around 94 on the dollar index.

dollar

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Yields

10-year yields fell below 3 percent.

yields


S&P 500

The S&P rose higher, recovering all the day’s losses, plus yesterdays.  We likely get a retest of resistance around 2,742, and a breakout tomorrow in my opinion.

sp500


Netflix

If Netflix is any indication of the future, then tomorrow the S&P 500 rises above resistance. Because Netflix broke out in a big way today. It is a breakout of epic proportions. Just look at the straight line following the breakout!

netflix

Not only that the breakout comes on better than average volume, with the RSI confirming the breakout, with a breakout of its own.

nflx

Make no mistake I think this is a very big breakout, not just for Netflix but the market. Netflix has been the leader all year long, and the soldiers will follow the generals, and there is no doubting Netflix’s leadership this year.

Technology

It wasn’t just Netflix that broke out today; the technology sector broke out too.

technology

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Amazon

No, Amazon still has not broken out, but when it does, it will be just further confirmation, of the bullishness gripping stocks.

amazon

You know where I stand and what I think.

-Mike


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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.

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8 Stocks To Watch For The Week of May 21 - Mott Capital

8 Stocks To Watch For The Week of May 21 – Mott Capital



8 Stocks To Watch For The Week of May 21

michael kramer and the clients of mott capital own shares of Aapl, googl, and Netflix
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I have been writing the past few days about the moves in semis, biotech, and the small caps, but I thought today we could focus on the large caps, because eventually for the S&P 500 to continue its rise, the large caps are going to have to get involved.


Apple

It would seem relatively easy to say that Apple has been hands down the best performer in May rising by nearly 13 percent, followed by Facebook, up half as much, increasing by about 6.5 percent. Alphabet is up about 5 percent, while Netflix and Intel are both up about 3.5 percent.

AAPL Chart

AAPL data by YCharts

How much higher can Apple rise, hard to say based on the charts. I never like to try to predict how high a stock can rise when it has broken to new highs; it becomes a guessing game for the most part.

aapl

But it is among the cheapest of the large-cap stocks based on a one-year forward PE earnings multiple around 14.1, while the group has an average of a one-year forward pe ratio of roughly 18.5, with a median of 16.5.

AAPL PE Ratio (Forward 1y) Chart

AAPL PE Ratio (Forward 1y) data by YCharts

Shares are also trading at the upper end of its historical earnings multiple range, so it would suggest there is likely further room for Apple stock to rise. However, that rise may be limited from here over the next quarter until we start getting details on the upcoming iPhone launch or better visibility into next year’s estimates.

Fundamental Chart Chart

Fundamental Chart data by YCharts


Amazon

Amazon’s stock has been stuck right below its previous highs and has thus far been denied what could be a massive breakout. I thought it would have happened this past week, but the market had its thoughts on the matter. But it is quite clear that the RSI is still trending lower, and the volume has been tailing off in the recent days.  So, does the declining volume mean the sellers are waning, or the buyers? Tough to tell with no clear stock price direction in place. If the stock doesn’t break out this week, then I’m beginning to think we retrace to around pre-earning levels of $1500, and it is clear the buyers are the ones that are fading.

amazon

Analysts have gotten more bullish on Amazon as well, upping their earnings estimates for the year by a stunning 48.3 percent to $12.83 per share over the past month. But everyone knows when it comes to EPS, those numbers are BS because Amazon does what it wants when it comes to profitability. Revenue estimates have only climbed by 1.57 percent to an amazing $237.26 billion, a growth rate, of get this, 33.4 percent! That is absolutely a fantastic amount of growth given the size of the revenue base.

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Alphabet

Alphabet has a rising RSI, and that is a positive sign momentum is still building in the stock. In fact, even Friday’s price action is a positive for the future direction. Volume has also remained relatively consistent. I still see this one rising to $1175. Plus, analysts have upped their earnings and revenue estimates for the balance of the year, by 4.5 percent and 1 percent respectively. So again, it suggests positive investor and analyst’s momentum.

GOOGL EPS Estimates for Current Fiscal Year Chart

GOOGL EPS Estimates for Current Fiscal Year data by YCharts


Intel

Intel continues to grind higher, and momentum appears to be higher as well.

intel

Analysts have upped their eps estimates by about 7.6 percent to $3.85 per share while raising revenue estimates by 3.9 percent to $67.6 billion.  The setup and the momentum continue to be strong.


JP Morgan

It had looked like JP Morgan shares broke out, and while it may merely be the way I drew out the trendline, but it appears the breakout is in jeopardy.  Volume levels have been steadily dropping, but the RSI is trending higher, and if the stock can find a bounce early in the week than perhaps momentum can continue higher.

jp morgan

Boeing

Boeing shares appear to have broken out and can increase back to $370 could be in order.

boeing

Microsoft

Microsoft has broken out as well and appears headed higher.

microsoft

Netflix

Finally, Netflix looks like it may be getting to breakout.

netflix

Good Luck this week

Mike


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Tags: #stockmarket #may21 #largecap #apple #microsoft #alphabet #microsoft #boeing #jpmorgan #netflix #amazon 

 

The Stock Market Is Moving Back To A Risk-On Mentality



The Stock Market Is Moving Back To A Risk-On Mentality

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The risk-on asset classes had good days, with Biotechs (XBI) up 1.4 percent, Chips (SOXX) up 1.3 percent, and materials (XLB) up about 1.2 percent. Risk-on is what one wants to see start to happen more because it tells us that investors are looking to move into more aggressive parts of the market, and that bodes well for a rise higher.

S&P 500

The S&P pieced together a decent day, rising about 40 bps, recovering about 2/3 of yesterday’s decline. It seems the past three days have been a game of back and forth filling the gaps from the previous day. The good news is that today, there was no gap up or down, and that should hopefully mean tomorrow we continue higher.

S&P 500


Sectors

The XBI continues higher and appears to be heading back to the previous highs.

xbi

The setup in Chips also continues to be very strong.

ch

What is ironic is just how much alike the two charts look. I guess the chips and biotechs are part of the same risk-on algo running.

Materials are also breaking out, and that, of course, is a positive as well.

materials


Russell

Not only that, but the Russell 2000 is breaking out as we talked about the other day.

russell 2000


Stocks

Nektar broke out today, after bouncing off our support level around $70.

nektar

Intercept looks close to breakout too.

icpt

Micron broke out and appears to be heading back to $61 now.

micron

Lam Research also appears to be breaking out and could be heading back to around $224.

lrcx

Texas Instruments back to $120.

txn

The suspense in Amazon is just killing me! BREAKOUT ALREADY!

amazon

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Dollar

It looks like the dollar finally broke out, and it seems clear which way it is going.

dollar

Night!

Mike

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Tags: #sp500 #biotech #materials #chips #nektar #amazon #micron #lam #texas 

 

Stocks and Sectors Breaking Out For The Week of May 14

Stocks and Sectors Breaking Out For The Week of May 14



Stocks and Sectors Breaking Out For The Week of May 14

Michael kramer and the clients of mott capital own shares of acad, dis, and googl
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The week of May 14 will try to continue to build on last week’s strong performance. With earnings pretty much behind us now, investors can continue to digest the strong earnings seasons. Meanwhile, the latest inflation and wage data should also calm nerves over runaway inflation or a Fed that will need to be over aggressively, and allow for stocks to continue to rally this week.

sp500

The S&P 500 broke out last week, and the relative strength index also broke out, and I think we should continue to see the broader market continue to trend higher this week. I’m still looking for a rise to about 2,800 on the S&P 500 over the next couple of weeks.

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Consumer Stocks

We have seen Technology names breakout over the past week, and I think we see the consumer stocks finally breakout this week.

The XLY ETF is very close to breaking out, and the RSI also appears set to breakout, I think that happens this week.

consumers


Amazon

As I have written previously, Amazon is close to breaking out, and I think that breakout can happen this week, as it sits right below resistance.

amazon


Home Depot

Home Depot is another one that already has broken out, and is reporting results on May 15. Analysts are looking for earnings for $2.05, on revenue of $25.2 billion.  A return to $210 may be reach for later this week.

home depot


Disney

Disney is also likely heading higher, potentially back to $111.

disney

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Nvidia

Technology stocks have already broken out, and we are going to want to see a strong continuation this week. Nvidia is going to be the one to watch here. It has broken out, and the earnings results served as a retest of the breakout, and it held. Now we to see a follow-through higher.

nvidia


Micron

Micron also broke out, and I think a rise to about $54 is in the works.

micron


Alphabet

Alphabet is has been on a tear, I think that one continues, on towards $1150.

alphabet


AMD

AMD has also broken out and a rise to $13.70 could be coming shortly.  amd

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Biotech

Another group I will be watching are the biotechs, to see if they can build on Friday’s strength.  The XBI appears to have broken out, and the RSI did as well.  We could see a rise back to the highs around $96.

biotech


Nektar

Nektar shares bounced right off support around $70, the key this week is if the stock can get back over $83.

nktr


Acadia

Acadia may also be close to breaking out and a push back to $27 would sure be nice.

acadia stock

 

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Tags: #amazon #consumer #technology #biotech #homedepot #acadia #nektar #disney #nvidia #amd #micron

FANG Stocks Are Still Cheap, More Gains To Come In 2018

FANG’s Stocks Are Still Cheap, More Gains To Come In 2018



FANG Stocks Are Still Cheap, More Gains To Come In 2018

Michael kramer and the clients of mott capital own shares of googl, nflx, and aapl
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With earnings season pretty much finished, analysts have been steadily adjusting estimates, and as a result, valuations have been re-weighted. It leaves me to believe that the FAANG’s will continue to have a strong run, and likely continue to be the market leaders.


Amazon

Amazon’s earnings estimates for 2018 have increased by 44 percent, and the street now sees the company earning $12.38 per shares, year over year growth of nearly 172 percent, while revenue is forecast to rise by almost 34 percent to $237.26 billion.
One must remember though that Amazon is not valued on a PE or earnings basis.

Amazon always has, and likely always will be evaluated on a sales basis. I’d hate to say it because I know many will not be happy to hear, but the stock based on its historical sales basis is not cheap, trading at currently 2.7 times next year’s sales estimates. The chart below shows that it is the highest multiple in over the past three years.

Fundamental Chart Chart

Fundamental Chart data by YCharts

Now, I realize that the dynamic of Amazon Web Services adds another layer of growth, that wasn’t there three years ago, we must assume a premium to historical trends is warranted, but one should be aware.

Amazon is a key to this market. I’m not saying I think Amazon is about to plunge, I’m just saying that the stock’s outperformance from this point forward for the balance of this year may be limited.


Facebook

Facebook’s estimates have also been tweaked higher, not nearly as much as Amazon. Forecasts over the past 30 days have climbed by 2.6 percent, and analysts now see Facebook’s earnings at $7.48 per share in 2018, a growth rate of 21.5 percent versus last year, while revenue is seen climbing nearly 39.25 percent to $56.61 billion.

Unlike Amazon, Facebook is trading at the cheapest earnings multiple in over the past three years. In fact, the last time shares were this cheap was in January of 2017, and we all know how good the year 2017 was for Facebook.

Fundamental Chart Chart

Fundamental Chart data by YCharts


Alphabet

Alphabet is another stock that is expected to have significant growth in 2018. Earnings estimates have been adjusted higher by about 5 percent since reporting results and are now seen climbing by 35 percent in 2018 to $43.26 per share. Meanwhile, revenue is expected to rise by 22.36 percent to $135.65 billion.

Alphabet is trading at 22.7 times 2019 earnings estimates, and while shares are not at their cheapest levels, they are not at their most expensive, trading at just 22.7 times 2019 estimates. It puts Alphabet in a strong position to continue climbing.

Fundamental Chart Chart

Fundamental Chart data by YCharts

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Netflix

Netflix is a subscriber growth story, which makes it more of a sales growth story, than an earnings growth story. Earnings for Netflix have been adjusted higher by 5.78 percent to $2.88 per share, while revenue has been upped to $16.10 billion in 2018, representing growth of 130 percent and 37.7 percent, respectively.

I created my crazy way to value Netflix, based on what I understand the story to be. I take the Market Cap and divide it by the number of Subscribers. I do this to get a sense of how the market values each subscriber. It looks like this:

Then I multiply it by ARPU. I do this because as subscribers grow, it creates more revenue, and as the ARPU also increases it also generates more revenue. Essentially each new subscriber added is worth more than the previous subscriber added. It looks like this:

We can see the market valuing subscribers at a much higher level than in the past. My thought process is that value will only continue to climb, because ARPU is now on a steady path higher.

While Netflix is not cheap today, it may be reasonable when considering that ARPU will continue to climb, as price increases continue to take hold, and subscribers continue to rise.


Apple

Finally, Apple’s estimates are unchanged for this year, at $11.55 per shares, and revenue of $261.12 billion, growing at 25.45 percent and 13.9 percent, respectively.

But the big thing for Apple, I believe will be a re-rating of the stock, as service revenue becomes the driving growth factor. Apple has never had a premium valuation because of the cyclical nature of the iPhone sales. But as service grows and becomes a more significant portion of total revenue, I believe the market will begin to give Apple a higher valuation. Will it ever be Netflix like, probably not.

But could it trade with more of a market like multiple? Sure. At 18 times 2019 earnings of $13.18 per share, Apple’s stock suddenly is worth about $240. I think if Apple can get another one or two-quarters of strong service revenue, I think that multiple becomes a reality.

That is it for today!

-Mike

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Biotech's Stock May Have Finally Been Unleashed

Biotech Stocks May Have Finally Been Unleashed

Biotech Stocks May Have Finally Been Unleashed

Michael Kramer and the Clients of Mott Capital Own CELG
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Stocks continued to move higher, led by the Biotech’s, which were up by about 3 percent. There’s something we haven’t said in a long time. The highly anticipated speech regarding drug prices by the President didn’t seem to be as bad as many had feared. Increasing competition, deregulation, cutting out the middlemen, is at the core of the proposals, based on my interpretation.

The drug pricing overhang had plagued this sector since September 2015, when Hillary Clinton made it a political point in the race for President. If this is the worst of it, I think the group might have much further to rise. Companies like Celgene, Gilead, Biogen, and Amgen are all trading at some of their lowest earnings multiples in years. Albeit for good reasons in some cases, but some of the valuations seem excessively low.

The details aren’t fully known yet, and what ends up getting put into law may be very different. But just knowing the blueprint for how they plan to tackle drug pricing might unleash the sector from the shackles of the past three years.

I think the group is likely heading higher.
biotech


S&P 500

The S&P 500 continues to rally, and finished near the highs at 2727, up about 2.5 percent. The setup continues to look strong.

sp500

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Amazon

Technology stocks continue to look strong as well and so do consumer stocks, even though Amazon still didn’t break out.  $1620 is proving, for now, to be tough for Amazon. Now that I’m calling for it to rise, it will probably go down! Ugh. We shall see.

amazon

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Nvidia

I’m surprised Nvidia was down today. But I also do not think today’s price actions mean the stock is going lower. Shares held firmly above support around $253. The results were stunning, and this probably keeps working higher.

nvda


Amgen

Amgen shares continue to look strong as well, with a well-defined double bottom, and what looks like a solid path towards $178 to $180 range.

amgen

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Gilead

Gilead also looks as if it could see a rise to about $72.

gilead


Biogen

Biogen also looks like it is on the cusp of a big breakout.

biogen

That is going to be it for today.

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Tags: #biotech #amgen #gilead #biogen #technology #amazon #sp500

Nvidia Crushes It, Amazon Nears Breakout, As Roku Fades

Nvidia Crushes It, Amazon Nears Breakout, As Roku Fades

Michael Kramer and the Clients of Mott Capital Own AAPL, NFLX, and GOOGL

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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.

spx

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The Setup In Stocks Continues To Improve

Technology

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.

technology


Microsoft

It looks like Microsoft did breakout today.  It probably has room to rise to around $101.

microsoft


Amazon

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.

amazon


Discretionaries

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.

consumers

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Energy

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.

energy


Financials

Financials are also finding a nice bounce here.

fianncials

Roku

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.

roku

Nvidia

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.

That’s It!

-Mike

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Tags: #micorsoft #technology #nvidia #amazon #roku

 

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Michael Kramer and the Clients of Mott Capital own shares of AAPL, NFLX

Another positive day on Wall Street with the S&P 500 climbing by nearly 1.3 percent closing at 2,663. I still happen to think the setup in the S&P 500 is positive, and rise to 2,800 is at work. I spoke about it the other day, and I continue to think that is very much case. The more I look through companies earnings and trends; the more positives keep emerging, over the negatives.   

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Technology

When looking at sectors the same positives trends keep showing up for the most part. In fact, it would appear the technology sector broke out today, and that is a very positive sign. In fact, a rise back towards $69 is maybe on the way.  The relative strength index broke out today as well.

xlk

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Getting Long Apple

A Rise Back To 2,800 On The S&P 500

Biotech

Biotech stocks have been stubborn and have been able to hold support at $100 nice. I think it sets the group for a rise of about 10 percent back to $110.

biotech

Consumer

We can see a similar pattern forming in the consumer discretionary stocks as well.

xly

The same with the chip sector.

soxx


Microsoft

Microsoft has a rising-triangle formation in, and that suggest may about to rise.

microsoft


Netflix

Netflix appears headed towards $340.

netflix


Not All Equal

But that doesn’t mean all stock is about to rise because Facebook, Amazon, and Broadcom have struggled to move higher, and I think it may continue to stay that way. Well, see though. I just find it interesting that Amazon and Facebook reported monster results, and the market hasn’t rewarded them in a big way.

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Apple

I teased this idea on the blog the other night about Apple and a Netflix like valuation. No, I do think Apple will trade at a 60 earnings multiple, but I think in time as investor begin to realize services are becoming a more significant part of the revenue, the market will give the company a higher earnings multiple, as the stock moves away from being primarily an iPhone business.

More and more of our lives are moving to mobile devices, and I think Apple will now start to provide even more services on top of the hardware to make substantial growth the future. Well see, but I like the idea enough, that I bought it today.

That is it for a Friday.

Mike

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Tags: #apple #netflix #amazon #technology #bitoech #microsoft #sp500

Is Apple The Next Netflix? Plus Why The Job Market Is Broken

Is Apple The Next Netflix? Plus Why The Job Market Is Broken

Michael Kramer and the Clients of Mott Capital own Netflix

Apple Vs. Netflix

I’m not going to spend much time on Apple tonight because I’d like to see how it trades tomorrow, and then expanded on the topic. But the service revenue growth was very impressive. But I shall tease with this. How much would Apple be worth if it traded with a Netflix or Amazon like valuation? It sounds crazy yes, but what if the key to Apple’s future isn’t the iPhone, but the content the iPhone can provide. Because as I said to my friend today at lunch prior to the Apple report, everything that is happening today is on the smartphone. I can run my whole business on my smartphone, and nearly all of my content for entertainment or web browsing is on the phone. If Apple should happen to own some of that content or charge a fee to access it, as service revenue would indicate, then that may be a huge growth opportunity and worth a higher earnings multiple.

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Moving on…

Economic Reports

There will be a lot of economic data over the next three days, ADP Private Jobs and FOMC tomorrow, then PMI Services and ISM non-manufacturing on Thursday, and BLS Jobs on Friday morning. Seems like plenty of economic data to get the markets rising of falling.

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ADP

We have been talking about this for some time, and since ADP only reports once a month, it has taken almost a year. But it seems to be pretty clear now that ADP job growth is starting to accelerate on a y/y basis, and the chart suggests we are beginning to make the “U” turn higher.

The BLS job number is also starting to turn higher, on y/y basis as well.


Broken Job Market

Fundamentally, I still think there is something wrong with the labor market, and what I find most curious, is that for the time since the 1940’s, the labor participation has been falling, as the unemployment is falling. It is clear as day in the chart below that since the 2008 recession the u3, u6 measures of unemployment, and the labor participation rate are falling together.  It mildly happened after the 2000 recession, but not like the most recent period.

If the unemployment rate is falling, then more people should be working, and that should mean the participation rate should be rising.


95 Million Americans Not In Labor Force

The issue comes from the fact that the population growth in this country is exceeding that of job creation, and the chart below shows that, giving us our 95 million Americans, not in the labor force.

It would tell me, that the low labor participation rate is not because of a flood of people retiring, is because there are people who still can’t find employment.


Stable Unemployment Rate

That is why I also still believe we will continue to see job growth in coming months and year, without seeing the unemployment fall below much 4 percent. As more jobs are created, more people will join the labor force and start looking again or start working on an “on the books” capacity. It may even cause the unemployment rate to rise.

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Not Enough Job Growth

The next chart illustrates just what I am talking above. It takes the change in the civilian labor vs. the prior year, divided by the total noninstitutional civilian labor force. It shows that in 1978, the number of jobs created represented nearly 2 percent of the population, while today it is merely three bps.


The Fed

We care about all of this stuff because the Fed sets monetary policy off maintaining full employment, and inflation.

There is also still a long way to go for wage growth to rise to a level of concern.

I doubt we find out the answer to any of this scenario in this week’s reports. But it is something to think about, and something I have been tracking since early 2016 when the unemployment rate was around 4.9 percent and I was even a more terrible writer than I am now. 🙂

Night

-Mike

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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.

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Tags: #apple #netflix #amazon #jobs #unemployment #labor 

 

amazon microsoft intel

Who Was It That Said Earnings Wouldn’t Save The Stock Market?

Who Was It That Said Earnings Wouldn’t Save The Stock Market?

Michael Kramer and the Clines of Mott Capital own shares of GOOGL,V,MA

Well, if there were any questions that a strong earnings season was not going to help lift stock, I think today’s price action officially blew that theory out of the water. Add on Amazon’s colossal beat, along with Intel and Microsoft, and tomorrow is likely shaping up to be another intense day.

One needs to remember companies like Amazon, Facebook, Microsoft, and Alphabet aren’t any companies,  these are among the most significant companies by market cap, within the top 5 of the S&P 500. When they go up big or down, they take the whole market with them.


Amazon

Amazon just blew away numbers, and crushed it on the bottom line, reporting earnings per share of $3.27 per share versus estimates of $1.25. It seems impressive just how much control Amazon has over its bottom line, it comes down to if they want to make a profit or not, not if they can make a profit, and that is something quite frankly, I have never seen before.

Revenues also beat in a big way coming in at $51 billion, vs. estimates of $49.94 billion. But more importantly, the company is guiding revenue estimates next quarter to $51 to $54 billion, primarily inline with estimates of $52.24 billion.

I know the stock is up big after, and between its monster 4 percent before results, and 6 percent move after, it now up about 10.5 percent in total, to $1,615.

The revenue guidance is very impressive to me and there is plenty to like in the quarter, well have to see where estimates going forward start coming. If we start getting meaningful revenue upgrades, then an argument can once again be made that Amazon as plenty of room to continue rising.

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Microsoft

Microsoft also reported strong results as well, with earnings beating estimates by $0.10, coming in at $0.95 per share, while revenue also top expectations coming in at $26.82 billion, vs. estimates of $25.78 billion. Again very strong numbers, and impressive levels of growth. Microsoft is basically unchanged in the after hours.

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0 For 5, What!

So lets see I’m gonna give myself an 0-2 as a follow-up to my five stock prediction article.   It makes my total predictions at 0 for 5, with the immediate after hours market reactions. But in all fairness, lets see where all these stocks are in a weeks time.

Beside I am right sometimes aren’t? LOL. Of course, I am, I nailed Visa, eBay, Intel, Qualcomm, Verizon, American Express, Netflix, to name a few. Look we all get things right and wrong, it is just the way it goes. You have to go with the flow.

Anyway, moving on then.


Intel

Intel reported a big beat, and the stock is also rocketing higher following results, and I continue to think this one is heading towards, $60. I targeted that level back in December. intel

I still think SQ has further to fall as well, perhaps towards $42.

dquare


Visa

Visa had a big day, and is trading at all-time highs, I think a rise above that upper trend line, accerlates the rise. The numbers were that good. I think upgrades are still to come.

visa


MasterCard

Pretty much where Visa goes, so too does MasterCard, so I expect good results from MasterCard as well, and could it too could be getting ready for a big push higher.

mastercard

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GE

Did you notice where GE stopped rising? Yeah at $14.85, I swear you really can’t make this stuff up!

ge

Good night, and thanks for reading!

-Mike

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Tags: #stockmarket #ge #amazon #Microsoft #visa #mastercard #intel 

The Stock Market Faces A Critical Test The Week of April 23

The Stock Market Faces A Critical Test The Week of April 23

The Stock Market Faces A Critical Test The Week of April 23

Michael Kramer and the Clients of Mott Capital own shares of NXPI, V, and SBUX

The week of April 23 will be a big week for earnings, and I already highlighted in my five predictions for earnings the outlooks for AMD, Alphabet, Microsoft, Facebook, and Amazon. But there are plenty of others such as Intel, Qualcomm, PayPal, Visa, Ford, General Motors, Starbucks, Exact Sciences, and the big Oil companies Exxon and Chevron.


Earnings Outlook

Yes, earnings do matter, and more important will be those outlooks for the coming quarters. According to data from Dow Jones S&P Indices, earnings are expected to climb by 40 percent in 2018 to $153,90 from $109.58  in 2017, that is a massive rise in profits, for one-year, and that leaves the S&P 500 trading at 17.35 times 2018 estimates. Earnings are seen climbing another 10 percent in 2019 to $168.64 and that leaves the S&P 500 trading at 15.8 times 2019 estimates. What do you think happens to those estimates should earnings be better than expected? That is right, full-year numbers come up; if they are weaker than predicted those estimates come down. In both cases, we find out stocks are cheaper than or more expensive than we thought. So how big are earnings and the outlooks? Very big.

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Chips

Semiconductors have been hammered over the past week, and with Intel, Texas Instruments, and Qualcomm reporting we are going to get a perfect sense if Taiwan Semi was a one-off, or if there is more pain in the group to come.

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Intel

Intel has been trending higher, and the relative strength index looks like a loaded coil, ready to pop. Meanwhile, the trend is overwhelmingly bullish, and that makes me think the stock pops higher.


Qualcomm/NXP

Qualcomm is near the low-end of the range, and perhaps we get some good news this week on some progress regarding the NXP Semiconductor deal. The NXP deal is a massive deal for Qualcomm and is extremely important to drive future revenue growth for the company.

qualcomm

As a shareholder of NXP, I’d love to get my $127.50 per share, from Qualcomm. But I’m more than okay if they don’t, because I continue to love this company going forward as a standalone, especially when trading 12.5 times next year earnings.


Starbucks

Starbucks has been trending higher, but every quarter has been met with disappointment. It will come down to same-store comps, and growth in China this quarter.

Despite all the headwinds this company has faced, an all-time is within reach.

 


Exact Sciences

Although my trading channel may be to narrow, the direction of the trend seems to be one way.


PayPal

The trend in PayPal is lower at this point, and the RSI is trending that way as well. Support at $73 is extremely important in this case, should PayPal fall.


Visa

Visa has been in a channel now for some time, and it appears shares and the RSI have both broken out from a downtrend, with a positive setup in place.

visa

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Exxon

Exxon shares can’t get out of a long-term downtrend, and while support at $72 held, this stock is not going anywhere until it breaks above that downtrend.

xom


Chevron

Chevron may have room to rise towards $135.

chevron

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Ford

I think the Ford chart is self-explanatory.

That is gonna be it. Good Luck

 

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Tags: #stockmarket #sp500 #amazon #facebook #amd #alphabet #microsoft #earnings

5 Monster Stock Predictions For Earnings During The Week of April 23

5 Monster Stock Predictions For Earnings During The Week of April 23

5 Monster Stock Predictions For Earnings During The Week of April 23

Michael Kramer and the Clients of Mott Capital own shares of GOOGL

With earnings seasons underway, the intensity picks up in a big way this coming week, with Alphabet kicking things off this Monday afternoon, and then companies like AMD, Qualcomm, Facebook, PayPal, Amazon, Microsoft, and Intel later in the week. I have highlighted and attempted to predict the direction of the stocks following results, for five stocks, Alphabet, AMD, Facebook, Microsoft, and Amazon. Hope you enjoy, and good luck.

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Alphabet

Estimates

Shares of Alphabet have a one-year forward PE ratio of about 22, putting it among some of the cheapest technology companies. Analysts are looking for the company to report that first-quarter earnings fell by 7 percent to $9.28 per share, while revenue is expected to climb by over 22 percent to $30.26 billion. Revenue estimates have been creeping up since the start of the year, from $29.43 billion, according to Ycharts, a rise of 1.78 percent.

Options

The long straddle options strategy for expiration on May 18, are not pricing in a massive move in Alphabet shares, a rise or fall of only 7 percent, placing the stock in a trading range of about $1000 to $1150 from the 1,075 strike price.

The implied volatility is currently around 47, and that suggests a one standard deviation move of about of 6.5 percent, so again not a huge move.

Technicals

The technical’s are sending mixed signals, but that seems to be the case with every stock chart these days. The stock price recently filled a gap at $1,096 but failed to break above that resistance level. But there is a clear uptrend in the chart currently, and the $1,000 level acted as a firm support level during a time that saw very high volume levels. Additionally, it is clear that volume declined as the stock settled in around $1,000 support, which would suggest that selling pressure was easing, resulting in the stock move higher. Additionally, the relative strength index (RSI) reached an oversold condition in mid-February, and that lead to an RSI that is rising and trending higher, while the downtrend in the RSI had been broken.

googl

Price Target

The average analyst price target would suggest a rise of about 17 percent, to $1275.

The underlying technicals are bullish; the options market seems not to be looking for a big move in shares of Alphabet either, which likely implies no big surprises, while analyst trends in revenue and earnings have been relatively steady.

It would seem to suggest to me that the market is set for shares of Alphabet to rise post-earnings.

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AMD

Estimates

AMD is expected to report on April 25, and analysts estimates are expecting revenue to rise by 59 percent to $1.566 billion, while earnings are forecast to be flat at $0.09 per share. That doesn’t give me a warm and fuzzy feeling. It would suggest two things going into these results, a risk of a significant miss or a significant beat. But based on the latest set of results from Lam Research and Taiwan Semi, it makes me a little bit concerned for a miss; there seem to be a tremendous amount of operational risk here such as declining margins, or revenue falling short.

Options

The options market appears to agree, because the long straddle options strategy is pricing in a rise or fall for the stock of 13.7 percent by expiration on May 18, from the $10 strike price. It places the stock in a trading range of $8.65 to $11.35.  The puts at the $10 strike price out weight the call by a ratio of nearly 2:1 with 51,000 open put contracts to approximately 25,000 call contracts, again a bearish indication.

The term structure of the implied volatility implies a tremendous amount of volatility too. The near-term options have an implied volatility level over 90 over the next seven days, and that also means a rise or fall in the stock about 12.5 percent.

Technicals

The technical chart is also bearish at this point, with a clear downtrend in place, while failing at resistance at $10.70. The RSI is also trending lower, while volume levels have yet to reach a capitulation type of moment.  Should the stock rise on better than expected results a jump to $11.70 seems possible, while bad results could see the stock fall to early April lows around $9.

Analyst Price Targets

The average price target on the stock has been trimmed since the start of the year falling to $13.77 down from $14.04, a decline of nearly 2 percent. Meanwhile, of the 31 analysts that cover the stock 35 percent rate the stock a “buy” or “outperform,” while 45 percent rate it a “hold,” and 19 percent rating it an “underperform” or “sell.”

All of these signals appear to be negative and suggest the market seems setup for shares to fall post results.


Facebook

Facebook’s results are going to be huge, as investors await commentary on the fall out from the Cambridge Analytica data scandal.

Estimates

Analysts are looking for Facebook to report that earnings fell by 1.75 percent to $1.34 in the first-quarter, while revenue is seen rising 42 percent to $11.42 billion. Facebook naturally will significant expenses in the future when it comes to putting more staff in place to better monitor what is happening on its platform. In fact, analysts have trimmed their earnings results for the quarter from $1.38 per share since March 19.

Options

The options market has an implied volatility of roughly 55 percent, and that suggests a one standard deviation move of about 7.6 percent, putting the stock in a trading range of $153 to $179.

Technicals

The technical chart still has a solid downtrend in place, but the big volume levels in the stock around $150, also suggest a current floor in the stock. The RSI also hit oversold levels at the end of the March, but, it too still has a solid downtrend in place.

facebook

Other Factors

Rising cost continues to be a significant issue for Facebook going forward, while it is also unclear how users are responding, and the overhang of potential regulatory issues loom.

It would not be surprising to see a retest of the $150 lows following results.


Microsoft

Estimates

Analysts estimates see Microsoft earnings climbing by 16.5 percent when it reports fiscal third-quarter results to $0.85, while revenue is seen jumping by only 9.5 percent. Analysts are bullish on Microsoft and have been raising their price target on the stock since the start of the year, pushing the price target to $105.71, up by 13.15 percent since January 5, from roughly $93.40.

Options

The options market is not implying a big move in shares of Microsoft post results, with an implied volatility of roughly 44 percent. It represents a rise or fall of 6 percent. The $95 Calls set for expiration on May 18 outweigh the puts by a ratio of 9 to 1, with almost 39,000 open call options versus 4,000 put contracts. The number of open call contracts is a sizeable dollar bet at that strike price worth nearly $11.8 million.

Technicals

The chart is sending bearish indications, with an RSI trending lower and falling volume levels as the stock price continues to rise, two bearish divergences. Meanwhile, the long-term trend is higher though, and that is a still a bullish signal.

The options market and analysts price target are both overwhelming bullish, and with such a big jump in revenue during the quarter, it may not be too hard for the company to top earnings estimates. The real test will come should shares be able to breakout technically and rise above $97. Be mindful of a gap higher following results, only for that gap to be refilled.

microsoft


Amazon

Estimates

Amazon’s stock is up nearly 31 percent on the year and has been among the best-performing stocks in the market. Analysts estimates are looking for revenue to have climbed by 41 percent, to $49.92 billion, while earnings are seen falling by nearly 18 percent to $1.22 per share. Amazon has a history of being incredibly inconsistent when reporting earnings, with either big beats or significant misses. It all comes down to how much the company is investing in R&D and such during the quarter.

Options

The implied volatility is at 61 percent, and that means shares could rise or fall by 8.5 percent, putting the stock in a trading range between $1398 and $1656. The options set to expire on May 18 at the at the $1530 strike price have put to call ratio of about 1:1, with 4,900 open call contracts to 4,500 open put contracts.

Technicals

There is a long-term uptrend in the stock, but the RSI has turned bearish, with the RSI trending lower. There was a significant surge in volume when shares reached $1360, and that would seem to be strong support for now. But with the divergence in the stock price and the RSI, it would suggest that shares still have further to fall, after results.

amazon

Hope you enjoyed the 5 predictions for earnings for the coming week.

-Mike

 

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