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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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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 #materials #chips #nektar #amazon #micron #lam #texas 

 

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Micron’s Massive Breakout, Plus Skyworks, Lam, Biogen, Alnylam & More


Micron’s Massive Breakout, Plus Skyworks, Lam, Biogen, Alnylam & More

The stock market was mixed on Monday, with the S&P 500 finishing the day down slightly. Technology and Biotechnology continue to be the best performing sectors in the market, with the Nasdaq Biotech IBB rising by 40 bps, and the Technology ETF XLK rising by 45 bps. The semiconductor ETF SOXX was the best performing group up another over 1 percent.

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Micron

Micron’s stock was the most prominent winner up by nearly 9 percent, with the stock eclipsing the $58 technical level we had been targeting for some time. The move higher came after Nomura raised its price target on the stock to amazing $100, nearly doubling its previous target of $55. Meanwhile, Evercore upgraded the stock to $80 from $60.

If you are a Micron bull, then the good news, is the next resistance level comes somewhere around $68.

micron

Option volume was also very bullish today as well, with nearly 41,000 call contracts trading at the $55 strike price, an implies a breakeven price of nearly $62. Meanwhile, 30,000 calls contracts traded at the $60, and implies a breakeven price of nearly $64.

micron options


Skyworks

Skyworks has quietly worked its way back to nearly an all-time high. So much for the Apple supercycle issues. That is likely because Skyworks continues to diversify its customers away from Apple and continues to drive earnings and revenue growth.

skworks


Lam

Lam Research broke out, rising above its previous high, on surging volume.  Could shares climb all the way to $250? It doesn’t seem outside of the realm of possibility.

lam reserarch

 

Biogen

Biogen shares better find a bounce or the final nail may be put in the coffin of this stock. The stock sits on it technical support level around $280, and should this break below $275; it is likely headed another 11 percent lower, towards $250.

biogen

Alnylam

Shares of Alnylam broke out today, crossing above $139.50 its previous all-time high.

anylam

If the old guard biotechs aren’t going to lead the group higher, other companies are going to have to pick up the slack. Today it was Alnylam, Alkermes, and Seattle Genetics turn.

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Alkermes

Alkermes has been floating above and below the $60 mark for some time, and it will be interesting to see if the stock can finally pull away to the upside. There is only a little bit of open interest at the May 2018 calls at the $60 strike price, with 1,700 contracts open. The calls cost about $5.00 bucks It is small bet, with a notional value of approximately $1.0 million, but the options are expensive with an implied volatility of nearly 48 percent. The stock would have to rise to about $65 to break even.

biotech

Seattle Genetics

Seattle Genetics is either close to a massive breakout or colossal breakdown. It looks a like a symmetrical triangle in the chart, and that would suggest a continuation of the prior uptrend. A Rise above $60 could bring the breakout.

 

seattle genetics

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Charter

Charter, the cable company, is a new one for us to explore and was one of the better consumer discretionary names today. The chart has a strong set-up. We will have to keep an eye.

charter

That’s It.

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Michael Kramer and the clients of Mott Capital own shares of SWKS, ALKS

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 #lam #skyworks #biogen #alnylam #alkermes #charter

Previewing Netflix, GE, Starbucks, Lam, and Intel Earnings Results

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Previewing Netflix, GE, Starbucks, Lam, and Intel Upcoming Earnings Results

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This week will feature earnings from some big companies such as Netflix, Starbucks, Verizon, GE, Lam Research, Celgene, Intel, and Caterpillar. Below is a chart of the major companies slated to report this week, I have compiled, along with the latest estimates, using Ycharts.

In this article, I will focus on Netflix, GE, Starbucks, Lam, and Intel only.

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earnings week of January 22

 

Netflix

The first company to kick things off will be Netflix and based on the run-up in the stock since the start of 2018; expectations appear to be sky high. According to Ycharts, consensus estimates are calling earnings of $0.41 and revenue of $3.28 billion. Earningswhisper.com is looking for an earnings beat of 2 cents, coming in at $0.43. The company last guided for domestic net additions of 1.25 million, and international net adds equaling 5.05 million, giving the company total net adds of 6.30 million, bringing total subscribers to about 115.55 million.

The chart suggests that there is support around $220, while a break of this support likely sends shares lower back towards $204. Additionally, the relative strength index is still in overbought territory with a reading of about 73.

netflix

The options market using a long straddle strategy of buying one put, and one call is suggesting a rise or fall for the stock of 10 percent for expiration on February 16. It would place the stock in a massive range of about 199.50 and 241, a range of 20 percent. The open interest on the calls, as of Friday was heavily favored towards the calls, with nearly 9,000 contracts, vs. 1,500 puts. It would suggest that more bets are being placed on shares rising.

GE

General Electric is expected to report on January 24, and with all the recent bad news that keeps flowing from the company, there is likely not much that should change when the company reports results. Estimates are calling for revenue of $33.75 billion, with earnings of $0.29, a decline of nearly 39 percent from the same period a year ago.

Technically the chart of the stock is broken and appear headed lower towards $14.80.

general electric ge

Starbucks

Starbucks is expected to report EPS of $0.57 and revenue of $6.2 billion. More interesting will be if Starbucks changes its full-year outlook given the new tax laws that were put into effect. The company pays an effective tax rate in the mid-30 percent range, and should that rate decline, then it could be a big boost to Starbucks bottom line. For now the street is guiding for 2018 earnings of $2.35.

The stock has recently broken out, rising above $59.50 and appears headed toward the previous highs above $64, and with shares trading, at only 19 times 2019 earnings estimates of $3.10 the stock could have plenty of upside beyond $64.

starbucks

Lam Research

Lam Research is expected to report results this week as well, and fiscal second quarter 2018 results are expected to come in at $3.67 on revenue of $2.56 billion. It was just last week that ASML reported strong results, which helped give Lam shares a significant boost.

The chart shows that the stock has been able to put in a substantial support level around $185 and appear to be rising back towards the previous highs around $220.

lam research

Intel

Intel had seen its shares rocked recently when news of security flaws in its chips came to light. But still the stock appears more than ok on a technical basis, with the stock nearly refilling the gap entirely.

intel

The street is looking for the company to report earnings of about $0.87 per share, on revenue of $16.34 billion. Earningswhisper.com is calling for earnings per share beat of $0.02, coming in at $0.89. The options market is not looking for much of a surprise when the company reports results. The February 16, long straddle using the $45 strike price is calling for a move of only 4 percent putting the shares in a range of $43 to $47.

Hope this helps gets you through some of the big results coming this week.

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Michael Kramer and the clients of Mott Capital own shares of NFLX and SBUX

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.

© 2017 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #netflix #intel #lam #ge #starbucks

Biotech Stocks

Biotech Stocks Monster Bounce Back, Plus Micron, Lam, Rates, and Oil

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Biotech Stocks Monster Bounce Back, Plus Micron, Lam, Rates, and Oil

If you aren’t investing in Biotech, then you aren’t living. Yesterday, biotech stocks were getting smashed, and today was like yesterday never happened. Today the S&P SPDR Biotech ETF (XBI) climbed by over 2.5 percent, and the NASDAQ Biotech ETF rose by nearly 2 percent. Believe it or not, the two ETF’s are trading at levels higher than where they started the day yesterday. Go figure. You can’t make this stuff up.

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XBI Price Chart

XBI Price data by YCharts

It is worth noting that many of the stocks we mentioned yesterdays such as Neurocrine ($NBIX), Exact Sciences ($EXAS), Clovis ($CLVS), Amicus ($FOLD), and Exelixis ($EXEL) did not recover their losses. Because those stocks fell on fundamental reason, and while the charts for each still look intact, they do have further downside risk.

XBI Price Chart

XBI Price data by YCharts

 

Nektar

But there were plenty of big winners, today with Nektar ($NKTR) for one surging by nearly 19 percent. Have you seen the chart of this thing? Wow! It is up 191 percent since November 1, a company with valued at almost $11 billion market cap. I’m sorry, I wish I knew more about this business, but I don’t. Maybe someone could shed some light on it?

Biotech

(Data compiled using Ycharts)

Bioverativ

Bioverativ ($BIVV) jumped by nearly 7 percent. Cowen raised its price to $100 from $80, noting the company’s 2017 preliminary results, and 2018 guidance. Technically the stock looks like it has officially broken out, but be careful here, the market loves to play the game of fill the gap, and that means the stock could give back the gains to $56.50, before resuming its upward trend.

Bivv

Alkermes

Alkermes shares jumped by over 5 percent today after the CEO was on a show called Mad Money with some other guy named Cramer (humor, it is ok to smile or chuckle). The stock looks like it trying to break out here, and it has plenty of things in the pipeline in 2018 to come.

alkermes


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Micron

Micron shares just don’t look appealing here, after that monster beat and excellent guidance. The stock has struggled mightily to break out, and again it failed at $47. I have said this before, and I will repeat it, $40 is critical to this one. Break $40 and lower the stock shall go. 

micron

Lam Research

Lam Research ($LRX) has performed well, and has solidified around support at $185-86, and is starting to make a nice move higher. The stock for now looks like it has broken a downtrend, with rising volume and rising relative strength, an increase towards $220 seems likely. 

lam

 


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Oil

In my ten predictions for 2018 coverage, I said Oil was heading to $75, and today it got one step closer. The commodity broke out rising comfortably above $62. There is no resistance between here and $75. 

oil

10-Year

I also predicted 10-year rates would climb to 3 percent, well that just had a massive breakout also today. 

ten yearThat is, until tomorrow.


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

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.

© 2017 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #biotech #exelixis #nvidia #neurocrine #amicus #XBI #IBB #ALKERMES #LAM #micron #nektar