Earnings Breakdowns - $AMZN $GOOGL $AAPL and more
This morning stocks gave up their early gains and looked poised to fulfill that correction scenario everyone seems to think is coming. Let's not get into the reasons, because we know its a lot easier to give a reason for stocks stocks to fall, after they fall, than it is to actually position for a fall because of said excuse. Monday Morning QB's don't have an off season in the stock market. Just ask those bears who were already penning their 150th "yeah I nailed this downside" blog post this morning as stocks reversed lower.
Yet again morning market weakness was just another opportunity for dip buyers, corporations, Central Banks, and/or the Plunge Protection team, depending on what disgruntled bear you ask......, to buy stocks at cheaper prices. Since 2009 each dip has worked out tremendously well for the dip buyers, and I didn't think this morning's dip will be any different. Even better I didn't give up today, I remained patient, and the market kindly cooperated. Everything came together.
Bonds fell off a cliff.
Anyone reading last nights update saw the looming overhead resistance. A level $TLT just could not break. Today buyers left and bonds collapsed.
After yesterday's rally, the sellers returned in full force today, driving down stocks and sending the US Dollar to a fresh 12+ year high as it soared almost 1% higher against a basket of depreciating currencies. I'll get into the US Dollar and the basket of depreciating currencies later, let's look at the market, where it could be headed, and what we can do about it.
Equity markets around the globe sold off today after the Yen strengthened sending the Nikkei down dramatically after comments from Japanese officials scared investors. We witnessed the same thing last week only to endure a remarkable recovery into the end of the week. Was the recovery nothing but a sell-able bounce? Are stocks poised for a big decline heading into the summer?
Two Fridays ago a late day swoon brought the bears out of hibernation. The Hindenburg Omen! Dirigible debris filled the sky. The end was near, sell everything and head for the hills! The bull market is over..... yet stocks closed the week higher. Go figure.
We find ourselves this week in a similar position. The bears are out of their caves, the fear is palpable, stocks are vulnerable, yet I think we have a good chance to close the week higher than we started. I'm not sure there are many people saying the same thing.
Below are a few charts for $AAPL, $GOOG, and $SPY. These chart are my opinion only as are where I think the market and these stocks are headed.
Based upon the last 9 months of trade for $GOOG I think 3 scenarios are possible but feel the most likely scenario is a move over $900. Late last week I told the chat room that I thought $GOOG was starting to curl after a long consolidation. That curl upward should lead to new all time highs. I don't think it happens this week but it will happen within the next few.
$AAPL remains well positioned for a move to $500, its just a matter of when. A few months ago I said the same thing about $BIDU with the stock at $84 a share, saying $100+ was coming. It took a little longer than I thought it would, but it came just the same. $AAPL the only question, in my mind, is when this move will occur. The bottom for the year was hit in April. I think this will hold. Right now we are looking at a very nice inverted head and shoulders and this will resolve 20% to the upside.
$SPY in my view has also bottomed for the time being. We are looking at a possible inverted head and shoulders. This should resolve with higher prices. I think $166+ on the $SPY could be hit this week going exactly against what everyone else thinks will happen and putting the few remaining bears out to bed again. Good night.
Finally, if someone put a gun to my head and asked where these stocks will close the week, I would calmly answer: $SPY $165.20, $GOOG 905, and $AAPL $450.
Yesterday was a somewhat lackluster day with a few movers. SHLD was a nice play on the put side at the open, and HLF ramped higher during the day on the calls side. Alcoa kicked off the official start to earning season by posting a profit and decent numbers. Futures are green and looks like we have a nice day today.
Skulcandy is up on a piece on marketwatch: SKUL possible Takeover? http://www.bloomberg.com/news/2013-01-09/skullcandy-turns-takeover-target-after-66-drop-real-m-a.html
Tons of analyst upgrades/downgrades and target changes with AMZN continuing to get bumped up with 3 changes today:
Amazon.com coverage assumed with a Buy at Goldman
Amazon.com price target raised to $300 from $274 at BofA/Merrill
BofA/Merrill expects Amazon's eCommerce gains to drive shares despite continued margin disappointments. Shares are Buy rated.
Amazon.com price target raised to $310 from $260 at Benchmark Co.
Benchmark Co. raised its price target for Amazon.com shares on expectations increasing digital sales and strong 3P sales could drive better than expected operating leverage in Q4 and 2013. The firm keeps a Buy rating on the stock.
Red Robin upgraded to Equal Weight from Underweight at Morgan Stanley
Morgan Stanley upgraded Red Robin due to top line initiatives that should help its comp forecast.
Ralph Lauren upgraded to Outperform from Neutral at Macquarie
Macquarie upgraded Ralph Lauren based on expectations for accelerating sales trends, easing currency headwinds, improving gross margins, and reduced investment spending, among other reasons. Price target is $190.
Apple may have shipped 46M+ iPhones in December quarter, says RBC Capital
After AT&T (T) reported that it sold a record 10M+ smartphones last quarter, RBC Capital believes that AT&T's announcement and its additional statements suggest that Apple shipped 46M+ iPhones in its December quarter. The firm maintains a $725 price target and Outperform rating on Apple
MasterCard upgraded to Buy from Neutral at Goldman
Goldman upgraded MasterCard based on higher transaction growth estimates, and strong credit and international volumes. Price target raised to $575 from $500
Visa upgraded to Conviction Buy from Buy at Goldman
Goldman added Visa to its Conviction Buy List and named it a top pick for 2013 given its leading position in payments, increased confidence in long-term transaction volume, and strong capital allocation prospects. Price target raised to $188 from $160
Today is the last day before EX-DIVY for BPT so I will be getting out of most my calls today, hoping it ramps over $80. Grabbed more $CALL calls yesterday and kicking myself for not getting any more SODA as the stock fell into the 45s and bounces near 47 to end the day. Would expect it to clear 48 again today.
Visa and Mastercard were upgraded at Goldman with Visa going on the conviction buy list. Been a heck of a run for both and looks like the runs continue today.
FB is having an event next week and invited press: http://blogs.wsj.com/digits/2013/01/08/facebook-issues-mystery-press-invitation/?mod=WSJBlog
Here are the strikes I like today:
|Stock Ticker||Call/Put||Strike||Expiration||Closing Price|
Small list but like what I am holding right now. Lets have a great day!