Friday, 24 April 2015

TVIX, UVXY - a market with no concerns

As equity indexes broke new highs, the VIX broke a new cycle low of 12.12 - the lowest level since early December. The 2x bullish VIX instruments of TVIX and UVXY saw net weekly declines of a significant -11.0% and -12.3% respecitvely. This remains a market that has no concern about anything.


TVIX, daily



UVXY, daily


Summary

*first, an update on the VIX, which saw a net weekly decline of -11.1%


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Clearly, VIX is now extremely low, but any look at the weekly.. or even monthly cycle, would be a reminder that the VIX can remain low for many weeks... if not months.

The next best opportunity for increased market volatility looks to be the FOMC of June 17th', when some will be moderately concerned that the US Fed will raise rates by 25bps.

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As for TVIX/UVXY... the problem of statistical decay remains... and currently those still resolutely holding long are bring ground to dust.
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*I have ZERO interest in being long the VIX for some months.

Thursday, 23 April 2015

FB, TWTR - mixed day for social media

Whilst the broader market battled higher, it was a mixed day for social media stocks. Facebook (FB) and Twitter (TWTR) settled lower by -2.6% and -0.6% respectively. Near term outlook is somewhat choppy, but mid/long term outlooks are bullish, for what remain two of the most popular of the momo stocks.


FB, daily



TWTR, daily



Summary

*I exited TWTR-long at the open... will consider a re-entry next week, ahead of Tuesday earnings.
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So.. FB EPS were 42 cents vs 40 exp., but revenue fractionally missed. Overall, the numbers were fine, and there is little reason why FB won't soon break into the low $90s.. at which point it should become obvious - even to the mainstream, that it is likely headed for the giant $100 threshold.
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As for TWTR, with earnings next Tuesday, things are very much in flux. There is plenty of chatter that TWTR has viable earnings upside of as much as 20%. Whilst that might seem out of range, it would not be the first time its seen such a reaction.

There is a clear price gap zone of $57/62. Rising trend/channel is offering $56 next Wed' morning.

The all time high for TWTR is $74.73 - from Dec'2013. Clearly, that is a long way up... roughly 50% from current levels. It will take continued broader market upside.. into the sp'2200/300s for TWTR to break into the mid 70s this summer/autumn.

However... barring some bizarre corporate failure, TWTR looks set to jump higher next week.

Wednesday, 22 April 2015

TSLA - the down trend has ended

Whilst the broader market saw moderate gains, there was notable strength in Tesla (TSLA), which settled higher by a very significant 4.8% @ $219.52. Even more important though, the down trend/resistance from Sept'2014 has been decisively broken... and near/mid term outlook is now bullish.


TSLA, daily



Summary

Suffice to say... a clear break of the down trend... having built a bull flag across the previous ten trading days.

Upside targets...

Initial.. 200dma @ $226
Primary $250
Secondary: Sept' high of $291... although this looks out of range for some months.
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Tuesday, 21 April 2015

ANR, BTU - the destruction continues

Whilst the broader market saw minor weak chop, it was just another lousy day for the coal mining stocks. Alpha Natural Resources (ANR) and Peabody Energy (BTU) closed lower by -5.7% and -3.9% respectively. The long term outlook for the sector remains bearish.


BTU, daily



ANR, daily


Summary

With the US 'war on coal' continuing, the coal sector stocks are still broadly falling.

There is simply nothing bullish in any of the coal miners, not least as commodities remain surpressed by a strong US Dollar.

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*I do not expect Arch Coal (ACI), ANR, or Walter Energy (WLT) to remain in their current form.. given another 6-18 months.

However, I do believe BTU will be a survivor, along with Consol (CNX). Coal for energy use will decline, but coal still has high importance for many industrial purposes.

Monday, 20 April 2015

STX - breaking out

With the broader equity market starting the week with somewhat significant gains, there was notable strength in Seagate (STX), settling +3.0% @ $59.15. The daily close just under the 200dma is rather significant, and bodes for 62/64 before end month.


STX, daily


Summary

Suffice to say, the second consecutive significant net daily gain.

Earnings were arguably 'reasonable' recently, and with a continuing share buy back, STX looks set to take out the Dec' high of $68.78.

*I am strongly bullish STX.. not least since I greatly favour their desktop drives. The storage industry continues to shift from HDD to SSD. STX is part of that shift, and should be fine across the long term.