MLR - PMP 10/15/13
Major averages gapped down yesterday then headed higher from the open as the push from quantitative easing and renewed hopes that an agreement on the budget and debt ceiling issues would be reached sooner than later. On the Senate floor, Senate Majority Leader Harry Reid said he was “very optimistic” about concluding deals “this week.” The "risk-on" small cap index Russell 2000 hit new highs, reflecting an optimistic market. Volume eased but the drop was likely due to the Columbus Day holiday. Banks and the bond market were closed.
Netflix (NFLX) had enough volume for a pocket pivot though the quality of its pocket pivot is debatable. Last week, at the height of the market's sell-off, the stock found support at its 50-day moving average and has since moved higher. Yesterday's move occurred after the company announced that it is in talks with several cable companies to include its services as an app on set-top cable boxes. NFLX's sales have accelerated and its earnings show it has managed to turn itself around. So on a price/volume basis, the stock is actionable. But on a fundamental basis, its critics argue that it is unlikely to evolve into an on-demand network co-marketed by the cable, phone and satellite pay-TV companies. The argument is that its allies have little to gain and much to risk if Netflix's subscriber growth continues much beyond current levels, and that current levels of subscribers are already priced into the stock.
Tesla Motors (TSLA) is gapping up this morning after Wedbush put an outperform rating and $240 price target on the stock. We are monitoring this action for a possible buyable gap-up and will report on TSLA as necessary later today.
This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.