Market Pulse.
Despite world economic slowdown, the rally continues unstoppable in Wall Street, and now the SP500 SPX is testing its important SMA200 average, that probably crossovers these days due to the crazy momentum it's having for near six weeks. Isn't clear why but the rebound is powerful. Seems that the US government shutdown ends for now, Powell and the more dovish FED, and the slow advances in Trade War negotiations are enough arguments for the stock market to climb 16% since its bottom in December 26th, overcoming the 61.8% of its Fibonacci, and definitely enter in bull territory. Time to check some stocks of my February' watchlist.
1. Cree Inc. CREE, $51.87
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After profit-taking in CREE and waiting for its earnings, as I post recently here, now I'm again long in this stock, because of its nice results and bullish indicators. Its Q2 widely beats the market (EPS $0.23 vs $0.15 estimate and $0.01 loss a year earlier, Sales $413M vs. $408.8M estimate, from $367.9M a year ago), and its Q3 guidance is mixed. It was the data I expected. Also can benefit with the growing cannabis industry, with it heating products. Today have completely recovered its fall since August and is testing its highest close since July 2014 ($52.83), with +20% race this year. Another good news: Oppenheimer raised its priced target to $59 from $53 keeping its outperform rating due to strong silicon carbide demand and improved operational performance. With a P/C=0.214, and taking advantage of its low implied volatility, isn't a bad idea to buy some calls, at the money, for the long-term. |
2. Marvell Technology MRVL, $18.31
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Marvell is a semiconductor provider of application-specific standard products. The Company is engaged in the design, development, and sale of integrated circuits used by a variety of global customers in the home automation, wearables or automotive, that's the "Internet of Things". From lows at $7.4 in January 2016, MRVL had a great rally until March 2018 ($25.18), starting there a solid correction. Since December is recovering, testing this week its SMA200 average, but its recent outlook was not well received by investors. They report a weaker than expected demand for storage controllers and expects the weakness to continue into Q1. Today, a downgrade from Craig-Hallum reinforced the market sentiment, not bearish but neutral.
Technically, the 38.2% of its Fibonacci at $18.50 is now a complicated resistance to overcome. But, in this case, the fundamental data was decisive to stay neutral in this stock until its next earnings report on March 7th. Possible short in the short-term.
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3. Ubiquiti Networks UBNT, $109.59
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As I mentioned in a 2018 post, UBNT is one of my favorite stocks. But for me, after an amazing 2018, is time for taking profits, just before Thursday, its Q3 earnings. Their fundamentals are still fine, but I perceive certain exhaustion in its stock price: volume is decreasing, and the $115 seems to be a difficult level to overcome. Also, its MACD has a clear divergence with price, that its peers in the industry (as PANW or FNSR) didn´t show. Definitely is a good stock for the long-term with place to grow, but, as usual, I prefer to wait for earnings results to proceed in the short-term. Good Trading! @BravoTrader | {fullWidth} |