Friday, September 7, 2018

5 US stocks to keep an eye on

Tags

With the US markets under pressure from the potential $200 billion in tariffs from the Trump administration against China, here are 5 interesting stocks that will attract investors' attention going forward:

Amazon

Author: Hadi Rachid

Fundamental Highlights

Amazon stock was in focus during this week, shares rose to an all-time high of $2,050.50, briefly giving it a market capitalization above $1 trillion, that is based on the 487,741,189 shares of common stock the company has outstanding. This capitalization comes due to its consistency in improving its core products and due to the fact that Amazon diversified its portfolio very quickly. It is the second U.S. traded company to hit that threshold, after Apple did about a month ago. It took Apple 38 years to reach the $1 trillion market cap, whereas it took the e-commerce giant only 21 years to do so.

Yet this stock seemed to be overbought based on Tuesday's numbers where the weekly RSI reached 85.69 which is the highest since 1999 and its monthly RSI reached 89.95 which is the highest ever. The fact that it was overbought ought to make it head for a reversal.

Technical Analysis

After reaching new recent highs, Amazon had started its move downwards. This bearish move may continue down towards the $1,951 level which makes it a potential short selling opportunity for traders.

Chart (H1)

Amazon

 


Apple

Author: Hadi Rachid

Fundamental Highlights

Apple Inc., trading near $222, remains up almost 32% since 1st Jan. The leading mega-cap tech was the first publicly traded company to reach a 1 trillion dollar market cap about a month ago. With its continues updates and improvements on its core products, the stock maintains its continuous bullish move. Apple is slated to report a product update on the iPhone at an event in San Francisco on Wednesday September 12th. This update may push the beloved tech company even further up.

Technical Analysis

Apple has maintained a bullish move in the past weeks. The stock has pulled back a little bit over the past few hours but it remains well-supported. The support is found around the $220 area and from there we may see a rebound towards previous high. This strong-cap tech company looks as a potentially strong buying opportunity.

Chart (H1)

Apple

 


TESLA INC.

Author: Fawzi Saliby

Fundamental Highlights

Shares of Tesla Inc. surged 3.2% in early trade on Thursday, on track to snap a 7-session losing streak, after Chief Executive Elon Musk tweeted a report in InsideEVs.com that Model 3 sales in August hit an all-time high of an estimated 17,800 units. The stock's bounce comes after it tumbled 13% over the past few sessions, amid growing concerns over Musk's leadership after his about-face on taking the company private, and reports of and SEC investigation. The InsideEVs report showed that Model 3 sales surpassed all passenger car sales in the US. Tesla is under pressure at the end of the week but we believe there's a strong chance that it may surprise many investors with a blowout, net income profitable third quarter, and the stock could go substantially higher from current levels.

Technical Analysis

TSLA stock price has been very volatile for the past year with random movements all over the place. But one thing we notice is that the conditions are now are very close to being in an oversold state. In addition to that, we also notice that historically the price have bounced back substantially after being in such extreme conditions. So even though the current momentum points lower, Tesla might be a good buying opportunity for those with a contrarian view as it offers an interesting risk/reward ratio.

Tesla

 


Facebook, Inc.

Author: Tarek Hoteit

Fundamental Highlights

Facebook’s stock started to plunge on July 25th following the official release of the second quarter financial report. Earnings per share came in at $1.74 versus the expected $1.72 and revenues printed lower than expected at $13.23 billion compare to $13.36 billion. However, the sell-off was not due to these figures but it was rather due to the company’s future outlook/guidance. Facebook’s chief financial officer, said that total revenue-growth rates “will continue to decelerate in the second half of 2018, and we expect our revenue-growth rates to decline by high-single-digit percentages from prior quarters sequentially in both Q3 and Q4.” Following that, he also mentioned that annual costs will rise 50%-60% relative to last year. Adding to the negativity, growth of both monthly active users and daily active users came in short of expectations.

Since the beginning of this month, Facebook has been facing some backlash from the U.S Congress as foreign/Russian agents used the social media platform to interfere in the most recent U.S election campaign. This prompted Congress to launch a congressional hearing in order to investigate this matter. During this time, Facebook’s shares have been taking a hit and this is due to the possibility that regulations will be imposed on social media companies which will most likely curb future growth.

Technical Analysis

FB has recently broke below the 166.73 support level paving the way for a drop towards the next support level at 152.18. The rejection of the 0.382 Fibonacci retracement is a good indicator that the stock is a downtrend. Adding to the bearish momentum, the pair is now officially trading below the key 200-period moving average indicating an official shift in the long term trend of the stock.

Chart (D1)

Facebook

 


Alibaba Group

Author: Tarek Hoteit

Fundamental Highlights

Alibaba Group Holding’s stock has been performing really badly in the past 3 months falling by 22% from the highs formed in June 14th of this year. The drop began after trade tensions between the U.S and China escalated with President Donald Trump announcing his plan to impose tariffs on up to $450 billion of Chinese imports. The ongoing trade war talks have been putting pressure on BABA’s stock as tariffs will most likely lead to a slowdown in the Chinese economy and a drop in the confidence of Chinese consumers which Alibaba’s top line growth relies on.

In their most recent quarterly report release, Alibaba’s showed huge revenue growth but profits were down due to new investments and businesses such as cloud computing and entertainment. China’s big tech companies are all spending heavily in new investments but the worry is that these investments will not deem profitable as the economy slows down. This explains why investors are not much excited about these newly developed businesses. Adding to the negative sentiment, analysts cut their full-year earnings estimates from 19% to 11%, while also cutting revenue growth from 52% to 49%.

Technical Analysis

BABA's stock has recently broke below the 164.36 support level exposing the next price action support level at 150.15. This support level also coincides with the 1.618 Fibonacci extension which will offer strong downward rejection at this level. For now, the trend is bearish following the support level break. Confirming the bearish momentum, the stock has been trading below the 200-period moving average for a month signaling a long term shift in the trend. On the short run, bearish momentum is also strong as the 50-period moving average have crossed below the 200-period moving average. We're setting our sights on the $150 support level.

Chart (D1)

Baba

 
Billion
Positions Opened
 
Thousand
Active Users
 
Trillion
Traded Value