The Next Apple iPhone Super Cycle Is Coming, Plus A Look At Amazon
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, SWKS, GOOGL
The S&P 500 broke out yet again today, rising to 2,914. That takes the index above the upper end of the trading channel. That likely means we see an acceleration of the current move higher over the coming days and weeks and may result in the S&P 500 going quickly to 3,000. Things get interesting once we get to 3,000. But let’s get there first before we start to worry about it. The longer-term chart I show below brings together some of the longer-term resistance levels that converge.
Biotechs continue to stay hot today, and I go through that sector in some detail in the member commentary today. I also discussed the potential for the Apple Super Cycle that no one is expecting, and a couple of other more minor topics. Big Biotech Breakout, Plus iPhone Super Cycle Maybe This Year!
The IBB Biotech ETF cleared resistance at $120 today, and that is a big win for the ETF. It is the first time it has been this high since 2015. I think this sends the ETF back to the highs around $133, about 10 percent higher.
There was a great article in Digitimes yesterday, which noted that iPhone shipments are expected to reach 70-75 million units by the end of the year. That would be the best performance since the iPhone 6 début in 2015. If that is the case, it would be some unexpected and pleasant news for many of the Apple suppliers, like Skyworks, Cirrus Logic, Qorvo, Broadcom and the likes. The stocks are not trading like a big iPhone super cycle is on the way.
It has been the opposite for a stock like Skyworks trading near its lows.
Qorvo is another stock that has gone nowhere over the past year.
We could get a sneak peek of the cycle when Broadcom reports results on September 6, for fiscal third-quarter. The quarter for Broadcom ends on July 30, so investors get an extra month to see how demand for the Apple cycle may be building versus the traditional quarter end companies that finished on June 30. Pay attention to the results and, of course, the guidance.
One stock that is doing very well is Apple, with the stock hovering around $223. I had laid out my bull case for Apple back at the start of May. Getting Long Apple
Amazon continues to climb, and today it increased above the upper channel of the wedge. While it is undoubtedly a good thing, we will now need to reassess where the stock goes from here. It was just a few weeks ago, I had targeted 2,020. The stock got an added boost when Morgan Stanley put a $2,500 price target.
Alphabet is another stock that has broken out rising above its downtrend, and Morgan Stanley put a $1515 price target on the stock. Again, I need to reevaluate the stock. But there is resistance now around $1290 first to get through.
Treasury yields managed to find a bit of a bounce presently at support, and I think it may just be a matter of time until that yield falls below the trend line.
That’s going to be all.
Michael Kramer is the Founder of Mott Capital and the creator of Reading the Markets.
I started learning to invest when I was 16 years old. At 40, I have pieced together a long career on Wall Street, working as an analyst, and a domestic and international equity trader at two multi-billion dollar equity firms.
I started Mott Capital in 2014 to follow a passion and dream of being in control of my career path.
The idea behind Reading the Markets was to help both individual and institutional investors benefit from my experience in the business and my unique approach to dissecting stocks and the markets, which helped me become a great trader.
Reading the Markets is a combination of technical, fundamental, a macro market analysis, trying to piece together the clues the market is sending in its future direction.
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