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OCTOBER 24
Stock mentions: AMZN, INTC, TSLA, TWTR, ROKU
Macro mentions: SPY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFT AND TSLA
Reading The Market SA Market Place Headlines:
Beyond Meat’s Plunge May Not Be Over
MACRO
The S&P 500 finished the day higher by about 20 bps again, closing at 3,010. Nothing really to report about here, because nothing changed. The index keeps banging against resistance at 3,014, and it continues to fail. However, that may change tomorrow. Once again, a bullish continuation pattern has formed on the chart, and it would suggest that the SPX rise above 3.014 tomorrow and push on towards 3,028.
STOCKS
Amazon (AMZN)
Anyway, Amazon’s stock is not having a good afternoon, with shares plunging to $1619 following results. It is what I wrote in this free story: Amazon’s Stock Will Need AWS To Deliver. Â I really couldn’t have drawn it up, any better. Should we move the column over to the target achieved? Perhaps. However, I generally wait until regular trading to resume for that.
I think investors forget that Amazon likes to spend a lot of money. When your R&D is rising by over 28% y/y or $2.1 billion, when operating income is razor-thin, to begin with, it takes a significant toll on earnings. Anyway, the problem runs deeper because AWS’s operating income grew by less than 9% y/y, its slowest pace ever. Is that because they are spending? They are spending. But the problem is that they are spending into slowing AWS growth, with sales rising by less than 35%, its slowest growth ever. The problem is that Amazon needs AWS to deliver; because AWS is the high margin part of their business. Again, one reason why I have never owned this stock, and probably never will. Microsoft is a much clear play on the cloud, which is why I do own Microsoft. Didn’t you watch my video on this topic on July 26? Amazon Vs. Microsoft, oh wait, that was subscriber-only video. Sorry. 😛
$1620 needs to hold, or $1520 is next.
Intel (INTC)
Intel is up after reporting better than expected results and providing solid guidance. No complaints from me here, again exactly as I thought it might happen, Intel’s Stock May Jump Followings Its Quarterly Report. The stock is trading above resistance at $53.50, and $56 still seems reasonable.
Tesla (TSLA)
Tesla held right around resistance all day today at $300. I think the stock needs to consolidate here for a bit before we even thinking about going up. But I don’t think once it resumes the next move will be higher.
Twitter (TWTR)
Not a good day for Twitter, the stock needs to hold $30.20. We saw this one coming.
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[youtube-feed feed=7]Roku (ROKU)
Uh-oh, it looks like Roku may be getting ready for its next move, higher with that pennant formation. $145 is the next level of resistance. I guess I’m going to get this one wrong this week.
Have a good one
-Mike
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.