Wednesday, March 31, 2010

Research In Motion Earnings

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After Wednesday's close RIMM reported sharply higher earnings for its fiscal fourth quarter but its stock dropped because its revenue fell short of Wall Street expectations. [AHT @ 8pm $70.50] For the three months that ended Feb. 27, RIM earned $710 million, or $1.27 per share [up 37 percent from a year earlier], expectation called for $1.28. However... revenue of $4.08B, while rising 18 percent over the same period a year earlier, was short of the $4.31B expected by analysts surveyed by Thomson Reuters.For the company's current quarter that ends May 29, RIM said it expects earnings per share of $1.31 to $1.38, above analyst expectations.

"We guided a really strong Q1 based on just what is going on now," CEO Jim Balsillie said referring to product launch plans. "If you saw the roadmap you'd be blown away."

Management blamed reductions in inventories held by wireless carriers and lower-than-expected average selling prices for the phones. Those prices are expected to remain low until RIM introduces new BlackBerry models later in the year. In the conference call RIM announced it is developing a new browser and new tools for outside programmers to write software applications that work on BlackBerrys. The browser and apps are two areas in which RIM lags behind Apple. The company benefited from strong international sales during the quarter. International sales accounted for 48% of total revenue for the period. But these markets prefer lower-priced handsets, such as the Curve. Gross margin for the fourth quarter came in at 45.7% -- higher than many analysts were expecting. RIMM appears to be gaining share on an international level, and possibly losing share on a North American basis.

Research In Motion Limited F4Q10 (Qtr End 02/28/2010) Earnings Call Transcript >>LINK

Below is a chart with actual eps & estimated eps along with a trend channel.

Dollar, Oil, Gold Review

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Who said it would be a quiet holiday week? End of the quarter, Jobs Report, and off shore drilling all moving the market.
Several charts today, first the dollar having crossed over resistance at 81 on Euro concerns, we may see the dollar break below that support/resistance. News prior to the open from the ADP employment survey should a negative 20,000 new jobs. Not good and may present a negative bias to Friday's Jobs Report. That could mean a weaker dollar, should be interesting with markets closed for Good Friday.

Crude oil is also at stiff resistance $83, a weaker dollar could send it over and higher. News from President Obama that he is considering aloowing US Offshore drilling should rally energy stocks. However, this appears to be a movce to get a favorable support for Cap & Trade... >>READ Itz portfolio has Transocean (RIG), Pride Int'l (PDE), Suncor Energy (SU), Pennwest (PWE) & PennGrowth (PGH).

Last chart is that of Gold. It's been floundering the last several weeks. Depending on what camp you're in either a stronger dollar or a weaker Euro has put pressure on gold. Actually it has held up fairly well, you can see the defined levels in the chart. Itz has favored silver over gold for 2010 and is leaning towards a platinum/palladium stock soon. Itz portfolio has Yamana (AUY) & Silver Wheaton (SLW).

Tuesday, March 30, 2010

Suncor (SU) Trending Higher

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Suncor (SU) has been rallying the last few days, now trading above its 50-ma and closing in on the 200-ma.Crude is trading around $82, talk on the street is that a break over $85 may see it rally to $95. That's been the Itz target for nearly 2 months now.
Canada’s Suncor Energy Inc. (NYSE: SU - News) has entered into an agreement to sell certain natural gas-heavy assets in west-central Alberta for C$235 million ($230 million) in cash. The name of the buyer was not disclosed. >>READ Again keep an eye on $33, may suggest a covered call at that level.

Research In Motion /Apple Followup

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Apple has taken the spot light in the last few months first with the introduction of iPad and now the CMDA & 4G iPhone news. It's stock is hitting all-time highs. But lets go back to the Apple-RIM lows, specifically January 29, 2010. Apple hit $192.06 while RIMM hit $62.91 (closing prices) as of pre-market trading 3-29-10 $236.28 AAPL & $73.95 RIMM the gains have been 23.02% & 17.55% respectively. Don't forget Research In Motion reports Wednesday and should rally off a better than expected report. Below is a chart from the Jan 29 lows to March 29 close.
Research in Motion Likely to Beat Estimates >> READ

Monday, March 29, 2010

Research In Motion (RIMM) Update

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As Research In Motion approaches earning this Wednesday, news that Apple (AAPL) will launch an iPhone this summer and also is working on a model compatible with Verizon Wireless' (VZ) CDMA architecture, said a published report citing sources. Apple and Verizon rose late. Research In Motion (RIMM) and AT&T (T) fell.>>Read  
Should be an interesting next few days, lets not forget that RIMM is big in China, not to mention PALM has lost its stride. RIMM is in their niche business enterprise segment, Apple is seen more as a consumer product. Looks like the three horsemen will be Research in Motion, Apple & Android.
Despite intense competition in the smartphone market, Research In Motion Ltd. is expected to maintain its strong pace of double-digit earnings growth when it reports results for its fourth fiscal quarter this week. >>Read
This past Friday, JP Morgan upgraded Research in Motion Limited to “overweight” (basically a buy) from “neutral” (basically a hold). Analysts expressed bullishness toward the smartphone sector, saying 2010 “will be the first year for true mass-market adoption of mobile computers.” This trend could bode well for RIMM, parent of the BlackBerry device. The banking giant also adjusted its 12-month price target on RIMM by 20% to $84 from $70.
Over the last several months Itz has repeatedly pointed out the bargain valuation that RIMM has presented.
RIMM will report earnings on Wednesday after the close, and analysts estimate per-share results of $1.28.

Suggest using any pullback to buy or add. Jan. 26, 2010 post...READ  March 23, 2010 post....READ

From CNBC: Peter Misek of Canaccord Adams tells Fast Money that according to his sources Apple is about to ink a deal with Verizon; confirming a published report.

Saturday, March 27, 2010

Itz Weekend Review

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Higher yields means increased government financing costs as the Obama administration borrows record amounts to sustain the recovery. U.S. marketable debt has risen to an unprecedented $7.41 trillion to fund a budget deficit the government predicts will swell to $1.6 trillion in the fiscal year ending Sept. 30. The Treasury will sell a record $2.55 trillion of notes and bonds this year, an increase of about $440 billion, or 21 percent, from last year, Morgan Stanley estimated at the end of 2009.

Nearterm the $TNX is in a Cup & Handle formation and set to breakout over a multi-month resistance trendline. Itz Stock Chartz is forecasting 4.3% nearterm...5.25% amid increased supply and as the Fed ends its housing debt purchase program.

The Baltic Dry Index ($BDI) is an up and coming indicator, especially since it tracks- trade with China and basically  they're a growing force in global growth.  It appears that China maybe slowing down nearterm, which will affect the Itz Pix holding Genco Shipping (GNK) & iShares China ETF (FXI). Genco has found strong support around $19 level over the past 12 months.

Itz Pix Portfolio this week, the decline in the Euro ($XEU) has taken its toll on the commodity plays, tech held up, RIMM, GOOG, JNPR. The leaders have been the financial sector stocks, Itz has reported several times that they'd be needed to lead this market to higher levels (1,200 S&P500 target).  Great moves on JPM & LNC as well as newly added CitiGroup (C), up nearly 12% in 2 weeks. Itz Pix exited (stopped out) of  Market Vectors Gold Miners ETF (GDX) flat on the trade. Currently on the radar is the Jr. Miners (GDXJ) & Stillwater Mining (SWC), a palladium, platinum miner.

Friday, March 26, 2010

JPMorgan Chase (JPM) : Target $53

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In anticipation of somewhat softer Q1 results due out late next month, analysts at Oppenheimer reduced earnings estimates on several of U.S.'s largest banks this morning. The firm notes that "mid-quarter downdraft in equity prices - which has since been reversed - generally pressured equity, M&A and investment banking revenues." Although Oppenheimer sees loan volumes continuing to fall moving forward, the firm still believes that these banks are on track for a solid multi-year rebound.

Oppenheimer lowered its Q1 earnings estimates on JPM.
JPMorgan (NYSE: JPM) from $0.79 to $0.70, vs. the analyst consensus of $0.65. Firm maintains an Outperform rating and $54 price target. Itz Stock Chartz has a $53 Price target if it breaks over $47 resistance.

Thursday, March 25, 2010

Financials Lead Equities Higher

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U.S. stocks climbed to 18-month highs Thursday as U.S. Federal Reserve Chairman Ben Bernanke reiterated the need for low interest rates while concerns over sovereign debt eased. ..Read
Markets giving back some of today's gains on Trichet comments...READ

Wednesday, March 24, 2010

How Much Lower Can Gold & Euro Go???

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Gold, silver, oil and most commodities took a hit Wednesday as the Euro ($XEU) broke below the 135 support level. Most analysts are looking for it to retrace towards it's recent lows of around 125. On the GOLD:EURO ratio- it is hovering just around 8-to-1 as most Europeans continue to buy gold as a hedge against their gov't debt issues. Some people are citing a 'strong' dollar...Itz doesn't agree. That it is more of a weaker Euro and stable dollar situation. Gold could have a downside risk of $1000 and the Euro towards 125 to maintain the 8:1 ratio. On a weekly chart the Euro is over sold, looks like a final leg down in the next few weeks could play out.
Itz Pix exited the gold mining etf GDX, buy still maintains Yamana (AUY) & Silver Wheaton (SLW) in it's portfolio. One shouldn't totally exit the gold position, a good reason to buy gold is the fact that the South Korean central bank said that it will start to buy gold and the weakness of euro.
Below is a video from CNBC & a rep from Fitch, which has some interesting comments on the downgrading of Portugal debt.

Euro Dominos First Greece, Now Portugal...

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European markets are mostly lower after Fitch Ratings said Portugal's recovery will be slower than other countries that use the euro, hurting Portugal's ability to repay its debt. Debt problems in Europe have been one of the few drags on stocks in recent months.

Mounting debt in Greece, Portugal and other euro-zone nations have investors worried the countries will struggle to rebound economically and upend a global recovery.
The dollar strengthened sharply against the euro and other major currencies. The dollar is at its highest level against the euro since May.[81.83 Dollar, 1.3353 as I type] Gold $1,091 & Silver $16.70. >>Read Story

Market Vectors Gold Miners ETF (GDX) was suggested Monday @ $44.30 with an original stop of $43.50, then raised to $44.30. The stock is currently trading @ that level with an intraday low of $44.08. Itz Pix exits GDX flat on the trade, but may again renter if warranted, note also on the radar is GDXJ. As for the markets in general, the S&P500 continues to hold above support 1150 and oil over $80. Itz targets near term are 1,200 & $90 respectively.

Tuesday, March 23, 2010

Research In Motion (RIMM) Going Higher

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Research in Motion (RIMM) even at current levels is still cheap. RIMM reports earnings next Wednesday. Itz posted this report on RIMM just about 5 weeks ago >>READ
Positive for RIMM are that they are moving on their 'apps' programs >>READ
The bottom line is that BlackBerry continues to reign supreme in many of the enterprise segments, albeit pressure from iPhone & Android. The smart phone market will top 1 billion users by 2014, according to research firm Parks Associates, more than quadruple the number in 2009.

Nearterm resistance on RIMM is $85 longer term price target $100 (Itz Pix target) RIMM reports earnings next Wednesday 3/31

United Health Group (UNH) & Health Reform

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Itz Stocks Chartz suggested United Health Group (UNH) back in October of '09 based on technical, fundamental & sentiment indicators. The chart back then was signaling over sold conditions. One has to remember that the company remained financially sound...but, the fear of the health system reforms drove the stock to extreme low levels. It was a suggested BUY on Oct. 9th @ $24.50. Itz did an update in following months >>READ
Now that the bill has been passed and is being signed by Presidnet Obama as I write this the markets are digesting the winners and losers in the coming years. During this recession and high unemployment many consumers have been forced to drop their insurance coverage. The premiums were set to skyrocket among the remaining pool. Insurance companies were being forced to raise premiums by as much as 40% later this year because of the profit squeeze. However, now that the bill has been passed the scenario has changed. With a government mandate to increase the pool by 32 million people and with the high probability of a strong Jobs Report in April, insurance company like UNH should benefit.

Monday, March 22, 2010

Could Financial Reform Be Bullish For Banks?

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Healthcare Reform albeit still contraversial is bullish for healthcare stocks, now Senator Dodd is pushing for a vote on the FinReg Bill without debate...>>Read Does this mean bank & financial stocks will rally? Itz Pix portfolio has JPMorgan (JPM) & Citibank (C). Dick Bove today issued a BUY on Citibank with a price target of $8.50. Itz Pix suggested entry last week @ $3.85.

Re-entering GDX

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Itz Pix suggest re-entering Market Vectors Gold Miners ETF (GDX)@ $44.30 Set stop @ $43.50.

Sunday, March 21, 2010

Gartman on Gold, the Dollar and Stocks

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Dennis Gartman talks about the relationship between the U.S. dollar and gold.
Well, theoretically there is some correlation between the U.S. dollar and gold. Characteristically, as the U.S. dollar weakens, gold tends to get stronger, but I'm not sure at this point that you can hang on to that thesis and [trade with it] as you might have a year or two years ago. We've seen gold go up even on days when the dollar is strong, which drives some people crazy and confuses them. I think gold is simply becoming the second reservable asset replacing the euro, which people thought was going to be the next reservable asset. The dollar remains the most important reservable asset for central banks around the world. Gold is now probably the second most..... gold in sterling terms, gold in euro terms, gold in yen terms, gold in Swiss franc terms keeps making new highs. I'm not smart enough -- and maybe when I trade another 10-15 years I'll be smart enough -- to be able to make a better answer to you. But the only answer that I can understand is that anyone who is short of gold in foreign currency terms is losing a lot of money. Anybody who is long of gold in foreign currency terms is, on balance, making a lot of money.
Excerpts from The link

Friday, March 19, 2010

Chart Technicals

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A check on the momentum indicators and whether technicals are signaling a tortoise rally, with Dan Wantrobski, Janney Montgomery Scott and Bill Strazzullo, Bell Curve Trading. Mr. Strazzullo, shares some of the views of Itz Stock Chartz on the upside/downside limits of the S&P500. Well worth a listen.

Cramer On Obamacare

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Cramer thinks the chances of a selloff are much higher now that it looks like Obama’s healthcare plan is going to pass, and it might include a higher tax on capital gains and dividends. James Cramer suggests upping positions in GOLD & Foreign stocks to 10% & 30% of one's portfolio, respectively.
CNBC's Kudlow Report 3/18/10

Thursday, March 18, 2010

What To Do?

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      What to do? I bet most of you are asking this question after listening & reading market analysts and managers opinions on the current market conditions. Should you take profits or not? Buy gold, sell gold, will the dollar go up or down? Lets simplify things, the CBO numbers today was go for Obamacare to more than likely pass the House this weekend. Now 72 hours have to pass before voting, meaning this Sunday. Then on to the Senate and most likely to the President's desk. However, you may see the Supreme Court get the last word on this process. But setting aside politics, if this as it appears to be, does pass, what will it mean to the markets? Itz believes that in the short term it will end uncertainty and rally the dollar, which means lower equity & commodity prices. But longer term the nearly $1 trillion dollar package means higher defecits and a lower dollar.
Do you act tomorrow before the possible vote or wait until Monday?
Itz posted on Twitter today to use the KISS method...Keep It Simple Stupid, meaning watch the S&P500 and the 1150 level. Being cautiously bullish, use that support as a sell signal. Itz upside target on the $SPX is 1200-1250, one may also consider writing covered calls against any positions, OTM April's.
Just keep in mind that the Healthcare package  still needs a handful of votes in the house, they gained 3 yesterday..BUT lost 2 today. Also, in a few weeks, expectations of a huge Jobs Report number will be a significant market mover. After all it appears that the US economy is recovering and earnings is what its all about.