Friday 31 August 2012

FB - another day, another dollar lower

Facebook (FB) continues on its decline towards fair value. It is certainly very pleasing to see this over hyped and overvalued company see continued declines. Yet, we are still some $6 from reaching the first target zone of $12/10.

FB, daily


FB remains a great unknown, its going to take a few more quarters of earnings just to have any real idea how they are coping as a listed company - with the inherent pressures, especially on the CEO.

The MACD cycle is again rolling over, and we're only day'1 down, so..FB could easily be in the 16/14 range by the end of September.

The original 'market zone' target of 12/10 does indeed look set to be hit this Autumn.

My 'fair value' of $4 won't be hit of course, after all, this market simply won't allow true 'fair value' in most cases. Yet, even $12/10 would be a real achievement for the bears who have been shorting since the 30s.

If the SP' can somehow - at least briefly, sink to the low 1200s this Autumn, then FB will indeed hit the 12/10 zone.

Thursday 30 August 2012

AAPL - failed breakout ?

Apple (AAPL) suffered a moderately weak day, falling $9.70 to around $663, a fall of 1.4%.

AAPL, daily


First downside target is old resistance of 640/45, that seems viable at any time, even as early as tomorrow - if the Bernanke upsets the market with his hole speech.

Secondary target is the 620/600 zone. It would seem very difficult for AAPL to break below this level in the near term.

AAPL remains very cheap relative to the main market, and it remains very amusing how so many are still fixated about the nominal stock price, rather than the actual price/earnings valution.

A clear near term sell, but long term, the trend remains starkly upward.

Tuesday 28 August 2012

AMZN - incredibly overvalued

Amazon (AMZN) the online retailer closed up another $2 today, truly incredible. It has cruised comfortably higher despite lousy earnings for Q2.

AMZN, daily


First, check the AMZN key stats, via yahoo

Forward P/E - assuming earnings (and the economy) hold together, is still over 100. That is INSANE, and even a dynamic and profitable company would be hard to justify 50. So, first.....the stock price should be cut in half..all else being unchanged.

My fair value for AMZN remains around $100...the minimum downside target. However, if AMZN fails to rationalise itself, improve efficiency, then fair value is considerably lower.

Worse case, if the economy does slip into recession, fair value is arguably somewhere between 60 and 20.

As ever, its all in the timing

The problem remains for those wanting to short - just as was the case with NLFX, CMG, GMCR, timing. How many more months will the market tolerate the current delusional rating?

It could easily be into 2013, and if the broad market holds together, AMZN could be over $300 by then.

At some point, reality will hit this stock, and the clown networks will be ' one saw this coming'.

The only issue is indeed...when.

Thursday 23 August 2012

HPQ - still lacking vision

Hewlett Packard (HPQ) posted reasonable earnings for Q2 at the close yesterday. Earnings were broadly in-line with market expectations, sales were a touch light, but nothing that could be labelled bad. However, the company still has long term structural issues, in what remains a very challenging sector.

HPQ, daily


Lets be clear, Q2 earnings data were okay, it certainly wasn't a terrible quarter.

However, the long term target of $15 looks very viable sometime in Q4 of this year. Even if the main market holds together, the trend remains weak, and the recent low of $17.50 really should not be too difficult to take out.

The lowly - and huge psychological level, of $10 looks only viable if the SP' breaks under 1100, which right now seems very unlikely this year.

HPQ remains a good in many respects, its certainly not going to disappear, but its likely to struggle across the next few years.

Tuesday 21 August 2012

AAPL - breakout...and a reversal ?

Apple (AAPL) lead the indexes lower today, closing lower by $8 to $656. A very minor decline, but it was a reasonable reversal from the morning new historic high of $674

AAPL, daily


First downside target - which could be hit as early as late Wednesday, is the 10MA of $635. Certainly, there is a high likelihood of some kind of bounce around that level. The big 50 day MA of $600 will provide very good support in the days ahead.

AAPL remains a great company, and without question is 'cheap', relative to the main market.

Primary price trend remains UP, so..shorting the AAPL is not exactly the best of shorts right now, never mind the very good fundamentals.

Thursday 16 August 2012

FB - more shares to sell, leading to lower prices

Facebook (FB) continues to decline. Its highly amusing how so many analysts on clown networks these past few weks have tended to entirely dismiss the shares that were due to be unlocked and are now allowed to be dumped.

FB, daily


Today's decline broke what was a very obvious bear flag. First target is probably somewhere in the 15s.

Were the market to 'somehow' collapse later this year to the sp'1100s, FB would very likely fall into single digits. Even if the market can continue to melt up to the sp'1500s (a sickly thought)'d still seem likely that the FB will struggle to hold above the mid teens.

Fair value remains $4, not that I would be a buyer at anything above $1.25

Wednesday 15 August 2012

ANR - another day..another decline

Alpha Natural Resources (ANR) remains a loss making coal miner - although that is very typical of the sector right now. Broad trend is a very straightforward...down.

ANR, daily


ANR remains in a very serious down trend. With underlying economic weakness in many countries, it seems almost impossible for anyone in this sector to make a profit.

The forward PE is...N/A..since its loss making! The real concern I have with ANR is the nearly $3bn of debt, this is twice the current market cap - not that 'market cap' has much to do with anything. I've no idea on the structure of the debt mini-mountain of ANR, but 3bn is rather a lot for a company that could easily be rated by Mr Market as just $700 million within the next 3-6mths.

For further details, see ANR company stats 

Price targets?

With ANR still losing money, how could anyone like this stock at any price point?

The whole thing smells somewhat like how PCX did last summer. It took less than a year for PCX to implode from $24 to effectively zero.

For ANR and JRCC, I'd be surprised if both of them are still around in summer 2013.

Tuesday 14 August 2012

GRPN - leading the FB lower

Another apocalyptic day for Groupon stockholders, losing 27%, to the lowly price of $5.50. This is somewhat lower than the IPO price of $20 last November.

Another set of retail investors..aka, dumb, naive 'hope and change' sheep, who have been systematically fleeced.

GRPN, daily

FB, daily


The over-valued and over-hyped piece of junk that is GRPN hit new lows today. Ohh the hilarity of seeing Mr Market bring out the hammer.

FB will follow GRPN of course..there is no doubt.

GRPN fair value - 10 cents...and that is probably being overly generous.
FB fair value - $4, and that's assuming someone doesn't start a website that is better.

TZA - a slightly higher low

Whilst the main indexes of the Dow and Sp' have put in higher highs in the past few weeks, the Rus'2000 small cap index has failed (along with the Transports).

TZA reflects this weakness, and despite the decay inherent in such 3x leveraged instruments, it has put in a higher low - relative to late March and early July.

TZA, daily


In price terms TZA is battling hard to hold above the recent low of 16.63.

First upside target for the bears is 19..and then 20.
The stop level for anyone adding new TZA is very clear, somewhere between 16.50 and 16.00.  Arguably, any break into the 15s, would be suggestive of autumnal downside to $10.

Monday 13 August 2012

TVIX, UVXY - the pain continues

Even though the broader markets were lower in the morning by 0.5%, the VIX was still -4%. Both the VIX long instruments suffered badly, breaking new lows.

TVIX, daily

UVXY, daily


New historic lows for both TVIX and UVXY, whilst the VIX is back to the low of early March in the 13s.

The statistical decay really is a nightmare, those holding from early June - when the indexes floored, are now down around 75%.

*Reverse splits remain imminently due on both the TVIX and UVXY.

Friday 10 August 2012

MANU - another failed IPO for US markets

Manchester United (MANU) got off to what is a lousy start today. With the brief spike at the open, it seems no one really wants to buy above the IPO list price. After the main market closed, immediately in after hours trading MANU - now without the support of the syndicate, fell below the $14.00 IPO issue price.

MANU, daily


The official close was $14.00  (*stockcharts will sometimes recognise the post 5-15 minutes as the closing level).

Regardless, without an algo-bot 'buy infinite shares @ $14.00', MANU can be expected to begin a very long slide starting next Monday.

First target? I'd guess the big $10 is a very obvious target for many.

I've frankly no idea whether MANU will even issue a dividend for these shares, which I believe will hold a mere 3% of the voting rights.

MANU...the latest IPO...that has started badly...and won't end any better.

Thursday 9 August 2012

RIG - still in a giant bear flag

Transocean (RIG) has been matching the NYSE composite index since the June low. If the main indexes do rollover in the coming few weeks, then RIG will break the bear flag..and a move into the mid 30s seems a given.

RIG, daily


First target for the bears remains a break of the flag, $46
Secondary target, take out the June low of $39.

A good company, but will greatly suffer if the US economy does slip into recession in Q3/4. If Oil prices also weaken, then RIG could even hit 30/25, although the latter seems more likely in spring 2013 than autumn 2012.

Wednesday 8 August 2012

PCLN - losing some of the shine

Priceline (PCLN) remains a very profitable and successful company, but their latest earnings report for Q2 did not please Mr Market. The momo-chasers were not satisfied in the least, and today PCLN closed lower by 17%.

PCLN, daily


Toda was indeed a huge drop, and there is probably more to come. First target is the key psychological level of $500, but a more likely level for PCLN would be to at least test the $440/400 level later this Autumn.

Lets be clear, PCLN has lowered its outlook, but it does remain a hugely profitable company. The simple fact is that its simply over-valued. I've not done too much reading on the latest earnings/outlook, but Fair Value could be somewhere in the $250/300 level.

It remains somewhat pleasing to see all the old momo stocks eventually revert back to somewhat more reasonable levels.

NFLX, GMCR, CMG, PCLN..and so many others.

Eventually, 'fair value' will return to the wider market, but that still looks like many months..if not years away.

Tuesday 7 August 2012

FB - another bout of selling

Whilst the main indexes continue to claw higher, Facebook (FB) suffered another significant sell off, losing 5% today.

FB, daily


Considering that the indexes are still very strong, this performance from FB is beyond dismal. Can you imagine how much lower FB would be if SP' sold off just to 1200, never mind anything lower?

Near target remains a new low in the low 19s, first late summer target is 15 or so. I have high confidence that sometime by late November, FB will be in the $12 to $10 zone.

Fair value remains $4, not that I'd even be a buyer at that level.

Friday 3 August 2012

TVIX, UVXY - forever...decaying

A lousy week for the bears, and again another major pain for those holding the VIX instruments TVIX and UVXY. Both continue to see significant decay, and hit historic lows.

TVIX, daily

UVXY, daily


Little needs to be said. With the VIX back in the 16s, both leveraged VIX bullish instruments saw further falls.

It will doubtless be the case that both TVIX and UVXY will imminently see a reverse split, probably a 1 for 10 for TVIX, and a 1 for 5 for UVXY.


Thursday 2 August 2012

KCG - near death..good riddance!

With their algo-bots gone wild yesterday - resulting in a $440 million loss, KCG is near death. Whether the remains get merged/picked up by some other company, is largely irrelevant. What is important, is that the mainstream is again being reminded of the damage that such companies do to the wider confidence in the broader equity markets.

KCG, daily


I have little other than contempt for those companies that use HFTs to front-run everyone out there. It looks like Knight will indeed implode in the next day or so. The loss of one algo-bot something to celebrated by all retail traders.

Good riddance KCG.

Wednesday 1 August 2012

UAL - ready to crash into the valley floor

United Continental (UAL) - as noted just over a week ago, was in real danger if it broke the lower channel line of the wedge. With the subsequent break, UAL remains in a steep decline, and there is no sign of a turn yet.

UAL, daily


There is nothing good about the current trend - not least since the broader market is still toppy. Sp'1200 would probably equate to UAL in the low teens...possibly 10, if Mr Market decides that a US recession is coming later this year.