Today Ill recap what happened in the NASDAQ As well as my outlook for AAPL after it officially became the world's largest company surpassing Exxon.
NASDAQ composite opened bullish on Monday Jan 23rd based on optimistic views about a Greek debt meeting as well as positive earnings outlook, however, early gains were erased as earnings came in less than expected and uncertainty about Greek debt resurfaced. The day ended relatively flat from opening.
On Tuesday the NASDAQ outperformed other indices, the tech index showed more resilience than the market withstanding the stall in Greek debt talks in Europe. The rally was supported by positive investor sentiment regarding tech stocks in the United States, and perhaps on the heels of expected tech giant’s earnings report.
On Tuesday night Apple Inc. released Q4 earnings report that were better than analyst expected, this led the stock 8.5% up and it carried the index along with it. On Wednesday NASDAQ composite index opened positive. The announcement by the Federal Reserve to keep interest rates low till 2014 also helped tech stocks and ensured that the NASDAQ composite index remained up on the day.
On Thursday, the NASDAQ opened up along with the market. Investors were still bullish after the statement from the Federal Reserve to keep interest rates low, as well as the possibility of more monetary stimulus also known as “Quantitative Easing (QE 3)”. Strong earnings reports from some tech companies were enough to propel the Index to further gains. By midday, the index began to inch down as investors began taking profits from the tech and financial sectors. The index closed down on the day due to profit taking and weak housing economic data.
The US released less than expected GDP growth data on Friday, this caused the NASDAQ composite Index to open lower on Friday. However, technology stocks rallied in the afternoon as investors bought back into the sector on pull backs. This caused a market wide rally and the NASDAQ finished positive for the week.
Outlook on NASDAQ
I believe NASDAQ will continue to be the index that is most resilient to macroeconomic data coming from Europe. However, it has seen an unusual bullish rally in January and is due for a pull back this week before continuing its rally.
APPLE
This week in Apple had quite an interesting story for the most part. On Monday analysts were preparing for Apple to release its Earnings report, most believed that they would produce positive reports from during the fourth quarter in 2011. Investors believed that they would beat estimates, these sentiments drove the stock price up and closed higher on the day. On Tuesday prices pulled back slightly as some investors exited their positions before earnings were to be released on Tuesday evening. Some negative news came out on Tuesday for AAPL; they lost a bid in Amsterdam for a ban on their competitor (Samsung Tablet). Regardless of the recent bad news analysis still advised investors to take position in apple going into their earnings report. I took a position in AAPL prior to a release of their earnings report because I believed that their iPhone 4s sales in the fourth quarter would be fantastic, thanks in large part to the gift giving season. On Tuesday evening AAPL released earnings that showed revenue of over US $46 Billion and $13.87/share which easily beat analysts’ estimates. This caused their share price to rise by 8% overnight. Seeing how I had a position in AAPL I decided to take profits at a high price and re-enter AAPL at a lower price. AAPL opened up 8.5% on Wednesday and traded down all day. On Thursday AAPL continued trading down as investors took profits. Most analysts have increased their price target on AAPL and remain Bullish.
Outlook for APPLE
I remain bullish on the tech giant, I believe in the fundamental strengths that this company has, as well as its incredible amount of cash on hand, totaling over US$98 Billion. I believe that investors will soon be done collecting profits caused by the huge gap up in price thanks to earnings. In the near future the price for AAPL will continue to increase and create new highs.
Till Later
Trade to Trade well
Pigs get Slaughtered!
Saturday 28 January 2012
Monday 23 January 2012
Waiting to be bullish on RIM
I'll start out by saying that I've spent the last 24 hours playing with my new Blackberry 9900 bold, and I must say that although I've missed the Blackberry, since i parted ways with the phone nothing's changed significantly. I took a temporary leave from the world of Blackberry back in June of 2011 when Samsung released the new Sidekick 4g with the android platform, I have been a fan of the Sidekick and the android platform, so when they were put together all bets were off, the berry couldn't hold me any more, but that's neither here nor there. What I'm trying to say is that since I put down my blackberry (or what was affectionately known as "crack-berry") for its competitor the Android, The company has failed to make any tangible changes or innovations to their handsets. Nothing significant has happened with the company or the devices they offer. As far as I understand consumers(Tech Savy consumers that want more in a phone than BBM and SMS) consider the phone makers to be a stagnant company that lacked innovation and refused to evolve with the industry. As a result Blackberry's share holders suffered a dismal performance last year with a stock price drop of over 70%. What then happened on December 20th to spark such a bullish run in the price of the stock until two days ago?
On December 20th 2011 RIM traded at $12.45 which marked the lowest price the stock has ever traded at. At these prices the company's shares were clearly oversold and investors saw some value, enough in fact to cause a mild rally (price correction ), or so I thought. What was supposed to be a technical correction of the price reverting to its [steeply downward sloping]moving average, turned for the most part to be a trend reversal of sorts as RIM broke through resistance at $15.50 and continued it's rally up until two days ago.
Perhaps investors noticed that RIM is clearly under valued, trading at a PE of just below 4 while its competitors are well over 10 (AAPL~12 and GOOG~16). If that's the case I could be a bullish Investor in RIM, but I'm not quite buying it, RIM has had a relatively low PE ratio for most of the latter part of last year and it failed to see investors flooding in. For this to be a solid trend change there needs to be a reason to believe they will grow. The market price for rim is obviously undervalued but no one has any concrete reason to believe that the company will sustain growth and remain relevant in a highly competitive environment. This brings me to my next point.
Shareholders have begged RIM to change its leadership for months, That's the obvious move that could revitalize a dying franchise. In my opinion that would be a step in the right direction, but for RIM to be truly successful (And ill probably get killed for this) they need to divest from their handset creating business, it's obviously not their strong suit. They have yet to make a handset(Cellular device) with crucial features that the everyday cell phone user needs (Front facing Camera, WiFi hotspot capabilities, really they have just introduced one handset with touch capabilities that is worth mentioning (Okay maybe 2), the GPS on any one of their phones is absolutely dismal[I'm not even sure the Bold 9900 has one] ). RIM's competitive edge is in its enterprise security and information technology. I will say without a shadow of a doubt that rim has the most secure operating system, but their handsets just aren't competing with others out there.
To my surprise; yesterday, as I was picking up my new blackberry bold 9900 (for reasons too long for this blog) I got a text telling me to check the news, lo and behold, the thing that every Research In Motion investor wanted for RIM was coming true, the board had appointed Thorsten Heins as the new CEO of RIM. At first I was sad, mainly because I was looking forward to a pull back that began two days ago so that I could find an attractive entry price and trade up till its over bought again, but I believed that this was a piece of good news that would move markets further in a bullish direction.
I woke up this morning to hear pre market bullish sentiments about RIM as I suspected, but a drastic change occurred when the market opened and inched to the contrary. Apparently Thorsten Heins had effectively thrown me a bone and said that he plans to change nothing about current operations at RIM[no drastic changes necessary]. The markets quickly reacted to this unexpected news and the stock suffered for it, thereby furthering its correction/decent, and potentially presenting me with an attractive entry price.
while I believe that investors will see the value in this undervalued stock, I cant see it reversing in trend just yet, until some catalyst of "EPIC PROPORTION" comes by and attracts a flock of eager investors. For now I will wait for pull back and a technical signal for an oversold sign to find an attractive entry point.
I've done some technical analysis to illustrate my points and share my POV.
PS. Forgive the image size, I'm not a pro at coding HTML ... YET
Till My next Post
Stay Bullish Or Bearish
Pigs Get Slaughtered
On December 20th 2011 RIM traded at $12.45 which marked the lowest price the stock has ever traded at. At these prices the company's shares were clearly oversold and investors saw some value, enough in fact to cause a mild rally (price correction ), or so I thought. What was supposed to be a technical correction of the price reverting to its [steeply downward sloping]moving average, turned for the most part to be a trend reversal of sorts as RIM broke through resistance at $15.50 and continued it's rally up until two days ago.
Perhaps investors noticed that RIM is clearly under valued, trading at a PE of just below 4 while its competitors are well over 10 (AAPL~12 and GOOG~16). If that's the case I could be a bullish Investor in RIM, but I'm not quite buying it, RIM has had a relatively low PE ratio for most of the latter part of last year and it failed to see investors flooding in. For this to be a solid trend change there needs to be a reason to believe they will grow. The market price for rim is obviously undervalued but no one has any concrete reason to believe that the company will sustain growth and remain relevant in a highly competitive environment. This brings me to my next point.
Shareholders have begged RIM to change its leadership for months, That's the obvious move that could revitalize a dying franchise. In my opinion that would be a step in the right direction, but for RIM to be truly successful (And ill probably get killed for this) they need to divest from their handset creating business, it's obviously not their strong suit. They have yet to make a handset(Cellular device) with crucial features that the everyday cell phone user needs (Front facing Camera, WiFi hotspot capabilities, really they have just introduced one handset with touch capabilities that is worth mentioning (Okay maybe 2), the GPS on any one of their phones is absolutely dismal[I'm not even sure the Bold 9900 has one] ). RIM's competitive edge is in its enterprise security and information technology. I will say without a shadow of a doubt that rim has the most secure operating system, but their handsets just aren't competing with others out there.
To my surprise; yesterday, as I was picking up my new blackberry bold 9900 (for reasons too long for this blog) I got a text telling me to check the news, lo and behold, the thing that every Research In Motion investor wanted for RIM was coming true, the board had appointed Thorsten Heins as the new CEO of RIM. At first I was sad, mainly because I was looking forward to a pull back that began two days ago so that I could find an attractive entry price and trade up till its over bought again, but I believed that this was a piece of good news that would move markets further in a bullish direction.
I woke up this morning to hear pre market bullish sentiments about RIM as I suspected, but a drastic change occurred when the market opened and inched to the contrary. Apparently Thorsten Heins had effectively thrown me a bone and said that he plans to change nothing about current operations at RIM[no drastic changes necessary]. The markets quickly reacted to this unexpected news and the stock suffered for it, thereby furthering its correction/decent, and potentially presenting me with an attractive entry price.
while I believe that investors will see the value in this undervalued stock, I cant see it reversing in trend just yet, until some catalyst of "EPIC PROPORTION" comes by and attracts a flock of eager investors. For now I will wait for pull back and a technical signal for an oversold sign to find an attractive entry point.
I've done some technical analysis to illustrate my points and share my POV.
PS. Forgive the image size, I'm not a pro at coding HTML ... YET
Till My next Post
Stay Bullish Or Bearish
Pigs Get Slaughtered
Saturday 21 January 2012
Last 3 months
I Apologize for the long absence, as a result i would like to recap the last three months in the S&P 500. I have also decided that this blog needs structure, I will post a weekly recap and outlook moving forward.
Recent Three Month History
October 2011 was a very bullish month for the Index. The index began the month at 1131.21 points and finished the month at 1253.30 points, with a high of 1292.66 and a low of 1074.77 for a month over month return of just over 10%. This marked the largest percentage gain on the index for the year 2011 after being at its yearly low (1074.77) at the start of the month. Part of the catalyst for the October rally was an agreement to boost the European region’s rescue fund to one trillion Euros. The rally was also partially spurred by an agreement to write down 50 percent on Greek debt. Finally, U.S economic indicators showed that the economy expanded in the third quarter at the fastest pace in a year, this eased concerns about a potential double dip recession, the growth trickled down into individual equities: as three-quarters of companies that reported third quarter results beat analyst estimates and on aggregate increased sales by 11 percent.
November 2011 was a month that began with some volatility; it was followed by a bearish decline in the index during the middle of the month. The index rebounded nicely into the end of November effectively recovering all the losses incurred in the month. In November 2011 the S&P 500 opened at 1251.00 and closed at 1246.96, with a high at 1277.55 and a low of 1158.66 for a month over month return of (-0.32%). To start off the month Investors were skeptical about Greeks ability to meet austerity measures necessary for a recovery, this skepticism was brought on by a call for a referendum on the debt crisis. The market rallied on positive economic data from the U.S soon after, but quickly pulled back due to more uncertainty in Greece. These uncertainties about Greece lead investors to fear about contagion in the European region, however, fears were mitigated by positive earnings reports as well as positive news from Greece and Italy; this fueled the volatility moving into the month of November. In the Middle of the month the fear of contagion resurfaced coupled with weaker readings on economic growth a bearish drop in the Index begun. On November 28th U.S retailers announces record breaking sales over the thanks giving weekend which sparked the rally going into the end of the month. Major central banks announced coordinated actions to provide liquidity to the global financial system, they also agreed to reduce interest rates for struggling European banks to put investors at ease.
December 2011 did not bring much change. The index started the month at 1246.91 and ended the month at 1257.60, the high was 1269.37 and a low of 1202.37. The last month of the year garnered a 0.85% return. In December Standard and Poor’s warned investors about an impending downgrade for the Euro-zone credit rating, this bad news was mitigated by news that the EU would discuss increasing the region’s debt rescue fund. Although the U.S Federal reserve assured Investors that the United States economy has been growing modestly, investors feared that there was no stimulus measures to offset a worsening European debt crisis. Signs of improving economic conditions in Germany and the United States in the form of increasing GDP and reducing jobless claims coupled with reducing yields on Spanish bonds sparked a late December rally. Investors felt optimistic about 2012 which caused a “Santa Claus” rally into the end of the year.
Thus far January has been a bullish month for the S&P 500. The index opened at 1258.86 and has rallied to 1315.38 for a 4% gain. Indicators point to a growing economy in the United States. This year there has been a reduced amount of jobless claims, which signifies an expanding economy. The rally was reinforced with positive news in Europe with regards to their bond auctions. January also marked the beginning of Q4 earning season. Other major events in the month include a downgrade of French credit rating, this downgrade instilled fear in investors as France is believed to be one of the strongest economies in the EU. The most recent news out of Europe has brought hope to investors; the IMF will raise additional funds to help combat Europe’s debt crisis. This bit of great news assisted a continued bullish rally in January.
Recent Three Month History
October 2011 was a very bullish month for the Index. The index began the month at 1131.21 points and finished the month at 1253.30 points, with a high of 1292.66 and a low of 1074.77 for a month over month return of just over 10%. This marked the largest percentage gain on the index for the year 2011 after being at its yearly low (1074.77) at the start of the month. Part of the catalyst for the October rally was an agreement to boost the European region’s rescue fund to one trillion Euros. The rally was also partially spurred by an agreement to write down 50 percent on Greek debt. Finally, U.S economic indicators showed that the economy expanded in the third quarter at the fastest pace in a year, this eased concerns about a potential double dip recession, the growth trickled down into individual equities: as three-quarters of companies that reported third quarter results beat analyst estimates and on aggregate increased sales by 11 percent.
November 2011 was a month that began with some volatility; it was followed by a bearish decline in the index during the middle of the month. The index rebounded nicely into the end of November effectively recovering all the losses incurred in the month. In November 2011 the S&P 500 opened at 1251.00 and closed at 1246.96, with a high at 1277.55 and a low of 1158.66 for a month over month return of (-0.32%). To start off the month Investors were skeptical about Greeks ability to meet austerity measures necessary for a recovery, this skepticism was brought on by a call for a referendum on the debt crisis. The market rallied on positive economic data from the U.S soon after, but quickly pulled back due to more uncertainty in Greece. These uncertainties about Greece lead investors to fear about contagion in the European region, however, fears were mitigated by positive earnings reports as well as positive news from Greece and Italy; this fueled the volatility moving into the month of November. In the Middle of the month the fear of contagion resurfaced coupled with weaker readings on economic growth a bearish drop in the Index begun. On November 28th U.S retailers announces record breaking sales over the thanks giving weekend which sparked the rally going into the end of the month. Major central banks announced coordinated actions to provide liquidity to the global financial system, they also agreed to reduce interest rates for struggling European banks to put investors at ease.
December 2011 did not bring much change. The index started the month at 1246.91 and ended the month at 1257.60, the high was 1269.37 and a low of 1202.37. The last month of the year garnered a 0.85% return. In December Standard and Poor’s warned investors about an impending downgrade for the Euro-zone credit rating, this bad news was mitigated by news that the EU would discuss increasing the region’s debt rescue fund. Although the U.S Federal reserve assured Investors that the United States economy has been growing modestly, investors feared that there was no stimulus measures to offset a worsening European debt crisis. Signs of improving economic conditions in Germany and the United States in the form of increasing GDP and reducing jobless claims coupled with reducing yields on Spanish bonds sparked a late December rally. Investors felt optimistic about 2012 which caused a “Santa Claus” rally into the end of the year.
Thus far January has been a bullish month for the S&P 500. The index opened at 1258.86 and has rallied to 1315.38 for a 4% gain. Indicators point to a growing economy in the United States. This year there has been a reduced amount of jobless claims, which signifies an expanding economy. The rally was reinforced with positive news in Europe with regards to their bond auctions. January also marked the beginning of Q4 earning season. Other major events in the month include a downgrade of French credit rating, this downgrade instilled fear in investors as France is believed to be one of the strongest economies in the EU. The most recent news out of Europe has brought hope to investors; the IMF will raise additional funds to help combat Europe’s debt crisis. This bit of great news assisted a continued bullish rally in January.
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