Thursday, July 28, 2016
The first hit is always on the house.
Joined Aug 2, 2009
1,537 Blog Posts

EVEN SATAN’S STOCK FOUND A BID

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Shares of $FEYE are breaking out today, and as I type, the stock is printing $18 on massive volume due to a buyout rumor and the ponytail’s pimping their book on the teevee. I’ve been sitting in August calls forever, so I welcome the chase attempt here.

You may be asking why I labeled this stock “Satan’s Stock.” Well, over the last year or more I started nibbling into these stocks on the way down. Was trying to shop growth stocks, the type that had the late 2013 melt-ups, and buy them 50% or more off their highs. I did this with $FEYE, and the stock into Q4 earnings literally shit the bed, as stocks gapped into an abyss not seen before. It trapped me, and was forced to empty my shares rather than stick to it and add.

$FEYE owes me. I hope to be here on the day it is acquired in order to be made whole on this pig.

OA

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FOR GOD SO LOVED THE WORLD, HE GAVE US FACEBOOK

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handsBy now you already know, shares of $FB melting higher after hours on a huge earnings beat.

The social media behemoth posted earnings of 97 cents per share, adjusted, on revenues of $6.44 billion in revenue in the second fiscal quarter. Analysts had expected 82 cents per share on revenues of $6.02 billion, according to a Thomson Reuters consensus estimate.

Facebook’s main money stream, ad revenue, hit $6.24 billion, versus the $5.8 billion expected by analysts surveyed by StreetAccount. Mobile ad revenue took the lion’s share (84 percent) at $5.42 billion, versus the $4.84 billion expected.

That means mobile ad revenue is up 81 percent year-over-year, the company said.

Monthly active users hit 1.71 billion during the quarter, also topping the 1.69 billion estimate from StreetAccount. Daily active users hit 1.13 billion, above the 1.11 billion expected. Monthly users on mobile increased 20 percent year-over-year, and daily users on mobile increased 22 percent year-over-year, the company said.

But Facebook was able to monetize those users more than expected, posting $3.82 average revenue per user, up from $3.32 last quarter and above the $3.59 expected.

This company is a serious game changer, eh? No position, FML.

OA

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TIMELY CALL ON THAT BIOTECH ROTATION

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Two weeks ago, I had been plotting a rotation into biotech stocks. To sum up my words that week, participants came into all time highs playing defense, and this was a critical step to signal offense.

The $IBB has been trending against the indices all day long. Any time that action occurs in a market like this, it confirms the landscape, which is that we’re trending higher…in case you haven’t noticed.

I pleaded with those selling positions yesterday to quickly buy back in. Moves like this are a positive signal to the overall health, and uptick in risk appetite of the overall market.

Carry on.

OA

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I BOUGHT $TWTR

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It’s no secret, I’ve held some $TWTR stock from Dick (Costello) prices. I knew once we traded @Dick for @Jack, I’d need to endure some pain for awhile. Thus I did. Never felt the time was right to average down, until last night.

I bought shares of $TWTR AH last night to bring down my basis. That report and the reaction kind of felt like a capitulation of sorts, and after watching this stock trade through months of discouragement, and start to slowly climb a wall of worry…this feels like aversion.

OA

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$AAPL SENTIMENT WAS THE TELL

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I’m a market history guy, and this is quite a good story to tell. If you can recall back into 2013, you’ll remember $AAPL trading in a similar range YTD. It was a $400 stock, but the price range, under performance, and sentiment were all the same.

Here’s a look at the two charts:

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I spent a lot of time covering the sentiment in $AAPL. There was a great dialogue about it back then, as well as an earnings trade that quarter when the stock broke out and never looked back.

I highlighted the weekly bar above in the 2013 chart, which serves as a good analog to current price action.

Here’s a weekly chart of $AAPL in its current set-up.

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The best tell from all this was the options. In both scenarios, this was the cheapest the options have been heading into earnings. Implied volatility hasn’t been this low for $AAPL since that 2013 earnings release.

To recall how bad sentiment was, it was a hot topic here at iBC. It was hated on the same way it has been now. Bearish opinions outweighed at least 5:1.

Should be a runner at the open when people realize they don’t own enough. I loaded up with some calls yesterday a few hours after the downgrade.

OA

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