This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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The Monster Stock Market Breakout We Have Been Waiting For
Michael Kramer and the clients of Mott Capital own shares of NFLX, ACAD, SWKS, CELG, AND GOOGL
MICHAEL KRAMER OWNS XLF PUTS
Watch our latest member’s video, get two-weeks free : Netflix Is Not Broken, Plus S&P May Rise To 3,000 Sooner Than You Think
Well another up day for stocks, and at this point the break out in the S&P 500 is well underway. The technical chart continues to demonstrate why. The S&P 500 once again test support at 2,794. But even better, today the index open below support and quickly snapped back to finish the day around 2,810.
The breakout appears to be in full effect, and the index looks primed to head back to 2,900 in the coming weeks.
You have to be pleased with Netflix’s performance today, by cutting its losses in half by days end. The stock opened the day around $345 to finish it around $380. But, my one concern is that the stock did fail many times intraday around $382. If you have been reading this blog long enough, then you remember that $382 had acted as a significant area of support at one point, and it is now clear that it shall act as resistance.
Was the quarter a dissappoint? Sure, I guess. Am I going to fret that they ONLY have 130 million subscribers instead of 131 million subscribers, No.
Are shares expensive, well not as expensive as some would make you believe. In fact, the stock trades at 85 times 2019 earnings estimates, but those earnings are expected to grow by 63 percent next year. It gives the stock, when adjusted for growth, a PEG ratio of 1.3, not terrible.
I know people scream that the stock trades at 175 times earnings, yeah its trailing twelve month PE. Who cares about the trailing twelve months? Investors that don’t get it, that’s who. You have to look FORWARD when looking at companies, not backward.
Walmart stock has broken out rising above resistance at $88.20.
Alphabet has a substantial breakout underway, and I will have to do some work on where it goes. But the company does report on Monday after the close.
The semiconductor stocks appear to be nearing a breakout as well, and that would be a huge positive if this sector can begin rising again.
Micron also looks set to break out as well. It just needs to clear the downtrend.
Skyworks reports results this week, July 19. It seems very early for them; they usually do not post results until after Apple. Not this time. So I’m hoping for something good. But the stock is once again attempting to breakout.
I’m starting to get a little bit nervous that I may have overstayed my welcome on the banks and that momentum is turning. I’m not ready to say they have broken out because they haven’t, but they are starting to make me a little bit nervous.
Biotech also continues to look strong, and Celgene is nearing a big breakout at $86.50
Gilead also continues to look strong here.
Acadia is back to $18, so that means another hit piece should be coming out any day. It feels more like someone has a grudge against this company than anything. The stock could climb to $21 if it can steer clear of some second rate “journalism” for a couple of weeks.
I focused on my portfolio way too much today, it was unintended, but it happens.
Anyway, there will be no commentary on Thursday as I will be a guest speaker at the StockTwit Future Forum.
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.