Stocks have been unable to gain any real upside traction and remain stuck below critical resistance areas. On Tuesday, the market once again tumbled, led by the consumer discretionary and financial sectors. #-ad_banner-#Year to date, financials are flat, lagging behind utilities, basic materials and health care stocks, but outperforming technology. As the largest industry in the economy, the financial sector — which includes brokers, banks and insurance companies — matters a great deal to the tone of the overall U.S. stock market. Taking note of how big financial stocks trade is important to understanding the trend in the… Read More

Stocks have been unable to gain any real upside traction and remain stuck below critical resistance areas. On Tuesday, the market once again tumbled, led by the consumer discretionary and financial sectors. #-ad_banner-#Year to date, financials are flat, lagging behind utilities, basic materials and health care stocks, but outperforming technology. As the largest industry in the economy, the financial sector — which includes brokers, banks and insurance companies — matters a great deal to the tone of the overall U.S. stock market. Taking note of how big financial stocks trade is important to understanding the trend in the broader stock market. On top of my watch list, Morgan Stanley (NYSE: MS) has a permanent spot on one of my eight monitors. It is one of my go-to stocks because it often gives me clues as to the broader market’s near- to medium-term direction. I check the trading action in MS at least three to four times a day, because more often than not, any sharp reversal or relative strength or weakness in the stock can quickly infect the broader market.  On an intraday basis, it rarely pays to short stocks when financials are strong, nor does it make… Read More

We are halfway through earnings season, and according to FactSet Research Systems (NYSE: FDS), 73% of the companies in the S&P 500 have beat consensus earnings estimates, but only 53% have exceeded revenue forecasts.  #-ad_banner-#Considering that we are now in the fifth year of a cyclical bull market (arguably within a new secular bull market), it would not be unusual for companies to find it difficult to grow the top line much more, which after all the cost cutting of recent years would now be needed to expand net income and margins further. Case in point, Amazon.com (NASDAQ: AMZN), which… Read More

We are halfway through earnings season, and according to FactSet Research Systems (NYSE: FDS), 73% of the companies in the S&P 500 have beat consensus earnings estimates, but only 53% have exceeded revenue forecasts.  #-ad_banner-#Considering that we are now in the fifth year of a cyclical bull market (arguably within a new secular bull market), it would not be unusual for companies to find it difficult to grow the top line much more, which after all the cost cutting of recent years would now be needed to expand net income and margins further. Case in point, Amazon.com (NASDAQ: AMZN), which reported first-quarter results on Thursday after the close. The company slightly exceeded Wall Street’s lowered expectations with sales of $19.7 billion versus analysts’ forecast of $19.4 billion, which represented a 23% gain on a year-over-year basis. Earnings per share (EPS) of $0.23 were in line with estimates and up from $0.18 in the same quarter one year ago.  What’s concerning for investors is that revenue growth for the quarter was roughly the same as one year ago and significantly below the 34% growth in 2012 and more than 40% in 2011. Looking toward the second quarter, AMZN could be reporting… Read More

With each earnings season comes an avalanche of corporate news, and not coincidentally, an abundance of high-probability trade setups. For my part, I like to wait for a company to report its results, let emotions settle somewhat, and then see how the news affected the charts.  #-ad_banner-#On Tuesday, semiconductor giant Intel (Nasdaq: INTC) reported first-quarter earnings per share (EPS) of $0.38, which beat the consensus estimate by a penny. On the top line, revenue of $12.8 billion was a touch below analysts’ estimates, but the company’s gross margin came in a better than expected at 59.7% versus 59%. Read More

With each earnings season comes an avalanche of corporate news, and not coincidentally, an abundance of high-probability trade setups. For my part, I like to wait for a company to report its results, let emotions settle somewhat, and then see how the news affected the charts.  #-ad_banner-#On Tuesday, semiconductor giant Intel (Nasdaq: INTC) reported first-quarter earnings per share (EPS) of $0.38, which beat the consensus estimate by a penny. On the top line, revenue of $12.8 billion was a touch below analysts’ estimates, but the company’s gross margin came in a better than expected at 59.7% versus 59%. In terms of the outlook for the second quarter and full fiscal year, nothing changed dramatically relative to Intel’s previous guidance or analysts’ expectations. After analysts had a chance to digest the news, the responses were mixed. Morgan Stanley reiterated an “underweight” rating on shares with a $24 price target. Goldman Sachs reiterated its “sell” rating, while Jefferies Group raised its price target from $32 to $35, giving it a “buy” rating. B. Riley & Co downgraded the stock to “neutral” from “buy,” but raised its price target by $0.50 to $29.  If there is one investment theme over the… Read More

The energy sector has showed great relative strength in recent weeks. While the broader market has been choppy and momentum groups such as social media and biotech have taken a beating, energy stocks have steadily rallied. #-ad_banner-#​ This constructive price action led me to take a closer look at a number of energy stocks, one of them being Chesapeake Energy (NYSE: CHK). The natural gas and oil producer looks enticing from a technical standpoint, as it appears to be on the verge of breaking out of a multi-month trading range. On March 28, the Energy Select Sector SPDR (NYSE:… Read More

The energy sector has showed great relative strength in recent weeks. While the broader market has been choppy and momentum groups such as social media and biotech have taken a beating, energy stocks have steadily rallied. #-ad_banner-#​ This constructive price action led me to take a closer look at a number of energy stocks, one of them being Chesapeake Energy (NYSE: CHK). The natural gas and oil producer looks enticing from a technical standpoint, as it appears to be on the verge of breaking out of a multi-month trading range. On March 28, the Energy Select Sector SPDR (NYSE: XLE) broke past a multi-month resistance level around $88.50, which may be just the beginning of a multi-month rally.  Considering that the current bull market in equities is about 5 years old, it’s likely getting somewhat long in the tooth, at least by historical standards. I think we’re in the late innings of a cyclical bull market, which often favors large caps, as well as basic materials and energy stocks. For a better view of relative performance, I often turn to ratio charts. Ratio charts show just that, a ratio between two securities or indices, such as the… Read More

“Sugar and spice and all things nice” came to mind when I saw last week’s rally in McCormick & Co. (NYSE: MKC) following its better-than-expected fiscal first-quarter earnings report Tuesday. #-ad_banner-#McCormick, which manufactures and distributes spices, herbs, extracts, seasonings and more, posted earnings of $0.62 per share, up 9% from the year-ago period. First-quarter revenue rose 6% year over year to $993.4 million. Analysts were expecting EPS of $0.58 on revenue of $974.5 million. Management reaffirmed its fiscal 2014 earnings forecast of $3.22 to $3.29 per share, in line with analysts’ estimates of $3.27 per share. Not all consumer staples… Read More

“Sugar and spice and all things nice” came to mind when I saw last week’s rally in McCormick & Co. (NYSE: MKC) following its better-than-expected fiscal first-quarter earnings report Tuesday. #-ad_banner-#McCormick, which manufactures and distributes spices, herbs, extracts, seasonings and more, posted earnings of $0.62 per share, up 9% from the year-ago period. First-quarter revenue rose 6% year over year to $993.4 million. Analysts were expecting EPS of $0.58 on revenue of $974.5 million. Management reaffirmed its fiscal 2014 earnings forecast of $3.22 to $3.29 per share, in line with analysts’ estimates of $3.27 per share. Not all consumer staples stocks are created equal, but by definition, demand for their products shows little elasticity, meaning that they’re purchased in roughly the same quantity regardless of the economic cycle. This is especially true of spices, as you can only season your food so much. Boring companies like spice manufacturers also don’t have much in the way of news flow, and can therefore trend nicely higher during bull markets, making for a no-hassle longer-term investment. (My colleague Dave Goodboy made a similar point last week, singling out MKC for unique praise.) As an active trader, I rarely gravitate toward a stock like… Read More

Alternative energy remains a major theme among investors and society as a whole. From an investing standpoint, solar energy, in particular, offers active investors and traders a number of liquid stocks to participate in. #-ad_banner-#Last week, First Solar (Nasdaq: FSLR), a leading designer and manufacturer of solar modules, staged a massive rally after the company gave positive guidance for the current fiscal year, as well as for 2015 and 2016. The forecast was better than analysts expected and also took investors by surprise, which led the stock to rally more than 35% on the week to levels last seen in… Read More

Alternative energy remains a major theme among investors and society as a whole. From an investing standpoint, solar energy, in particular, offers active investors and traders a number of liquid stocks to participate in. #-ad_banner-#Last week, First Solar (Nasdaq: FSLR), a leading designer and manufacturer of solar modules, staged a massive rally after the company gave positive guidance for the current fiscal year, as well as for 2015 and 2016. The forecast was better than analysts expected and also took investors by surprise, which led the stock to rally more than 35% on the week to levels last seen in 2011. But not all companies in the space — and not all solar stocks — are created equal. In stark contrast to FSLR, SolarCity (Nasdaq: SCTY), which offers solar energy systems, dropped close to 12% last week thanks to an unsatisfactory earnings report. One stock that I routinely go to for calculated trades is SunEdison (NYSE: SUNE), a manufacturer of semiconductors and solar energy technology. On March 20, SunEdison announced a series of transactions that are scheduled to take place concurrent with the initial public offering of its semiconductor division, SunEdison Semiconductor (SSL), splitting it off from its more lucrative… Read More

Fashion accessories maker Fossil Group (Nasdaq: FOSL) jumped 4.6% Tuesday after a technically important level and on the back of news that the company is working with Google (Nasdaq: GOOG) on its new Android-based watches. #-ad_banner-#Considering how long the speculation around a Google (or for that matter, an Apple (Nasdaq: AAPL)) smartwatch has been building, this news is rather big and likely unexpected for FOSL shareholders. After a weak stretch from November through the end of January, FOSL began to act better in early February ahead of its earnings report. On Feb. 11, after the close of trading, the company… Read More

Fashion accessories maker Fossil Group (Nasdaq: FOSL) jumped 4.6% Tuesday after a technically important level and on the back of news that the company is working with Google (Nasdaq: GOOG) on its new Android-based watches. #-ad_banner-#Considering how long the speculation around a Google (or for that matter, an Apple (Nasdaq: AAPL)) smartwatch has been building, this news is rather big and likely unexpected for FOSL shareholders. After a weak stretch from November through the end of January, FOSL began to act better in early February ahead of its earnings report. On Feb. 11, after the close of trading, the company reported fourth-quarter earnings per share (EPS) of $2.68 versus analyst estimates of $2.44, a 7% increase from the year-ago period. On the top line, FOSL had $1.06 billion in revenue, beating Street estimates of $1.02 billion. Sales were up 12% on a year-over-year basis. What the Google watch will mean for the company’s bottom line is impossible to say, considering that the entire smartwatch industry is barely in its infancy. Google is also working with Asus, HTC, LG, Motorola and Samsung, and chipmakers Broadcom (Nasdaq: BRCM), Imagination, Intel (Nasdaq: INTC), MediaTek and Qualcomm (Nasdaq: QCOM), so Fossil is far from… Read More

Agricultural nutrients producer Mosaic Company (NYSE: MOS) popped back on my radar earlier this week as many of its competitors began breaking through near-term resistance areas on their respective charts. On Feb. 11, MOS reported a drop in its fourth-quarter earnings. The company earned $129 million, or $0.30 per share, compared with $616 million, or $1.44 per share, a year ago. However, the stock responded with a 2.4% rally on the day, getting the ball rolling for a more meaningful breakout through resistance.#-ad_banner-# The day after the earnings report, Morgan Stanley (NYSE: MS) reiterated its “equal weight” rating on the… Read More

Agricultural nutrients producer Mosaic Company (NYSE: MOS) popped back on my radar earlier this week as many of its competitors began breaking through near-term resistance areas on their respective charts. On Feb. 11, MOS reported a drop in its fourth-quarter earnings. The company earned $129 million, or $0.30 per share, compared with $616 million, or $1.44 per share, a year ago. However, the stock responded with a 2.4% rally on the day, getting the ball rolling for a more meaningful breakout through resistance.#-ad_banner-# The day after the earnings report, Morgan Stanley (NYSE: MS) reiterated its “equal weight” rating on the stock in a marginally upbeat note. Finally, on Feb. 14, it was announced that Mosaic entered into a share repurchase agreement with Cargill family trusts to purchase approximately 8.2 million shares of Class A stock. This falls under the $1 billion share repurchase authorization that the company announced during its earnings conference call. The repurchases are taking place in two tranches, the first of which has already happened and the second is slated for mid-March. Share repurchases are often viewed as a positive sign, as they show a company’s confidence in its own performance. Mosaic’s share repurchases should be a… Read More

Software giant Microsoft (Nasdaq: MSFT) is reportedly cutting the price of its Windows 8.1 operating system for manufacturers of tablets and low-cost computers in an effort to compete with cheaper rivals like Google’s (Nasdaq: GOOG) Chromebooks. #-ad_banner-#Bloomberg reported that people familiar with the program said license fees of $15 will be charged to manufacturers who want to preinstall the software on any devices that will retail for less than $250. That’s a 70% discount from the usual $50 fee. In my view, this move was inevitable. Competition has stiffened in recent years for Microsoft, with Apple (Nasdaq: AAPL) making a… Read More

Software giant Microsoft (Nasdaq: MSFT) is reportedly cutting the price of its Windows 8.1 operating system for manufacturers of tablets and low-cost computers in an effort to compete with cheaper rivals like Google’s (Nasdaq: GOOG) Chromebooks. #-ad_banner-#Bloomberg reported that people familiar with the program said license fees of $15 will be charged to manufacturers who want to preinstall the software on any devices that will retail for less than $250. That’s a 70% discount from the usual $50 fee. In my view, this move was inevitable. Competition has stiffened in recent years for Microsoft, with Apple (Nasdaq: AAPL) making a huge push back into the personal computing/electronics space and Google transforming itself from an Internet search engine into a technology monster. More importantly, we have witnessed a structural shift in the personal computing space thanks to the astonishing growth in smartphones and tablets. These devices, while admittedly still in the early stages from a functionality point of view, are increasingly becoming the epicenter of personal computing. And the newer breed of technology companies like Google and Facebook (Nasdaq: FB) will take a larger part in this every day. The result is a healthy increase in competition that is forcing Microsoft… Read More

Best known by consumers for its cleaning robots, such as the Roomba vacuum cleaner, iRobot Corp. (Nasdaq: IRBT) also manufactures robots for military and civil defense forces that perform bomb disposals and other battlefield operations. #-ad_banner-#Last week, shares shot up more than 11% on a massive spike in volume, making all-time intraday and closing highs. The reason for the rally: an honor from the Patent Board for having one of the top patent portfolios. Out of 50 leading companies in the electronics and instruments industry, iRobot’s patent portfolio was ranked fifth. It was ranked second in the “science strength” category… Read More

Best known by consumers for its cleaning robots, such as the Roomba vacuum cleaner, iRobot Corp. (Nasdaq: IRBT) also manufactures robots for military and civil defense forces that perform bomb disposals and other battlefield operations. #-ad_banner-#Last week, shares shot up more than 11% on a massive spike in volume, making all-time intraday and closing highs. The reason for the rally: an honor from the Patent Board for having one of the top patent portfolios. Out of 50 leading companies in the electronics and instruments industry, iRobot’s patent portfolio was ranked fifth. It was ranked second in the “science strength” category and third in the “industry impact” category. iRobot holds more than 400 worldwide patents, 238 of which are in the United States. Earlier this month, the company reported fourth-quarter results that beat expectations on both the top and bottom line. Revenue rose 25.4% year over year, to $126.3 million, beating analyst estimates of $125.5 million. Earnings of $0.11 per share were up from a loss of $0.21 in the fourth quarter last year and beat the consensus estimate by a penny. In the full 2013 year, the company saw a 20% increase in sales in its home robots segment, but… Read More