Tag: scripsio

An emerging market is a country that doesn’t have all the characters of a developed market.  Examples of developed markets would be the US, Australia, England, Canada, etc. Years ago, when it came to emerging markets, it was all about the big four, BRICS – Brazil, Russia, India, and China. 

Since then, India, Mexico, South Africa, Thailand and several other countries are now considered emerging markets.  Countries wanting to join the club, known as frontier markets include include Egypt, Indonesia, Nigeria, Philippines, Vietnam, among others.  As these frontier markets develop, they could perhaps offer investors with handsome returns. 

The VanEck Vectors® Vietnam ETF (VNM®) seeks to replicate the performance of the MVIS® Vietnam Index (MVVNMTR®), which includes securities of publicly traded companies that are incorporated in Vietnam or that are incorporated outside of Vietnam but have at least 50% of their revenues/related assets in Vietnam.

“Recently, Vietnam has attracted global investor interest as a potential beneficiary of the ongoing trade war between the U.S. and China, but investors have also taken notice of the country’s attractive long-term fundamental characteristics,” said VanEck in a recent note.

The equity market there is small as highlighted by VNM’s roster of just 27 stocks. However, the nation is growing rapidly and its demographics are more favorable than larger Asian economies such as China and Japan.

“Vietnam is taking gradual steps to liberalize its markets, while seeking to avoid the negative impacts of capital flight,” according to VanEck. “Hot money is a real issue for frontier and emerging market economies, and the negative repercussions, including volatility, may have long lasting effects on the local economy.

Source

Now I see why they call it frontier markets, as these markets are still underdeveloped like the chart below. At some point, VNM will breakout…maybe by this time Vietnam joins the emerging market club.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Advanced Micro Devices reported their second quarter earnings yesterday, but they couldn’t live up to the expectations. Revenue was down 13% year over year, net income fell over 40% and AMD said that it expects its full-year results won’t be as good as the previous forecast.  On the news the stock fell double digits.

I remember writing a post about AMD almost one year ago and I remember that $33 level being a monthly supply zone which eventually push price to the sub $20 level.  It’s still so vivid because I remember I was wrong on the call and thought price was going higher. 

AMD Just Got Upgraded

NOTE: I should of known better, as very few things trump a monthly zone, but at the time, all I saw was AMD’s price continuing to higher after years of hibernation.

The CEO, Lisa Su said the weaker than expected forecast was due to weakness in gaming consoles as both Microsoft Corporation and Sony Corp announced they were coming out with new game consoles.  Needless to say the stock fell double digits yesterday.  However, I’m not surprised because the way that monthly supply got me almost a year ago, got many traders/investors who went long yesterday or didn’t take some profits off the table.

On the daily chart, price formed a “M” pattern which is a reversal pattern. So the potential price action over the coming days/weeks might be to the downside.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Three months ago, Ford announced first quarter earning in which net income declined, to $1.1 billion from $1.7 billion. Earnings per share were $0.29 cents per share, down from $0.44, but better than expected. Also, revenue fell to $40.3 billion from $41.9 billion a year earlier, but higher than expected. Beating the expectations were enough to send the stock 10% higher on Friday, it’s best one day performance since 2009.

Last year global car
sales declined for the first time since 2009. Based on first half U.S auto
sales, the U.S. auto sales are on pace to drop for a second year in a row.

Automakers are facing headwinds related to a trade war with China and threats of further tariffs up to 25% that could be implemented in November. The Chinese market also is facing oversaturation with predictions of a 7.5% decrease in sales this year after it began to shrink at the end of 2018.

The U.S. auto industry is heading toward a nearly 30% decrease in sales by 2022, a Bank of America Merrill Lynch analyst predicts.

Source

Yet this article I read on Yahoo Finance stated the 3 reasons to buy Ford under $10 were the following: Ford’s Volume and Market Share Trends Are Improving, Depressed Domestic Revenue Trends Will Turn Around, Profit Trends Are Moving in the Right Direction.

I won’t get into the details of the article because the case to buy Ford in my opinion is weak. All one has to do is look at the chart. The fact that price couldn’t even make it to the first weekly supply at $11.25, but stalled and fell at $10.50 tells you the #1 reason not to buy Ford under $10. The chart suggests price is going to fall to the monthly demand at $5.25.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

The NIFTY 50 is an index that benchmarks India’s stock market index representing the 50 of Indian’s top public companies in 13 sectors. The NIFTY 50 is about to have their worst monthly of the year and the chart suggests there is more downside risks.

The NIFTY 50 just closed below the 200 exponential moving average (EMA – yellow line). The 200 EMA is considered a key indicator by traders for determining the overall long-term trend. 200 EMA also used as major resistance line when price is below the 200 EMA.

Price is on the verge of breaking down and below the long up trendline dating back to 2016.  Trend traders will now start to come out from under their rocks and look to short the NIFTY 50 once they receive confirmation.

Although divergence is not an indicator based on a mathematical calculation, I believe it’s one of the most powerful indicators to a trader/investor.When people talk about divergence they are referring to the difference in movement between an oscillating indicator (i.e. MACD, CCI, RSI, Stochastic, etc.) and the price action.

Negative divergence occurs in an uptrend when the price action makes higher highs that are not confirmed by the oscillating indicator. This indicates a weakness in the uptrend as buying is less intense and selling or profit taking is increasing. And when negative divergence happens on monthly chart, watch out.

Thus, one possible set-up is if price can drop a bit more, it would have formed a nice daily supply zone at 11,300. Thus, my projected price action projectile is the following to 10,000, which happens to be a major support line and a psychological round whole number.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Two weeks ago Domino’s Pizza (DPZ) posted weaker-than-expected sales during the second quarter. Same-store sales grew at 3% vs expectations of 4.6% domestic. Same-store sales internationally grew 2.4%, but also missed analyst expectations for 2.6% growth. On the news the stock price was fell 9%.  This marks the second consecutive quarter where Domino’s disappointed Wall Street. 

Same store sales decreasing is indirectly part of Domino’s “fortress” strategy.  Domino’s is under attack by the food delivery companies in which stay at home diners have a lot more options at their disposal.  So Domino’s is aggressively adding store at the sacrifice of existing stores the clear risk of saturating its existing territories.   The “fortress” strategy is to control the experience of getting the pizza quickly and hot to the customer.  I could understand getting the pizza there quickly and now I completely understand why they won’t to deliver their own pizza.

U.S. Foods, one of the country’s biggest food services companies, conducted a survey of over 1,500 American adults who use food delivery apps and 497 food delivery workers to highlight the emerging industry.

One jarring finding: 28% of deliverers said that they have actually eaten food from the orders they were supposed to deliver.

The biggest complaints among customers? Food that’s not warm and fresh took the top spot, followed by late food and incorrect orders. And in order to ensure freshness and quality, 85% of customers said that they would like the restaurants to provide tamper-evident labels.

Source

Not only do I love Domino’s pizza, but I love how they use technology to stay ahead of the competition.  I do anticipate them finding their lane within this growing new field of food delivery longer term.  However, short term, the chart suggests, the stock price has room to  fall to the weekly demand at $227.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Five months ago, I wrote,

Unusual Options Activity In Bed, Bath and Beyond

After the earnings announcement in January, I was itching to short Bed, Bath and Beyond through put options, but I decided to wait in case there was more upside in the price. However, yesterday, I noticed some bearish unusual option activity. The Smart Money bought over 30,000 May $14 strike put options.

What I also like is the position already established in the $12.5 strike put options as well. Lastly, what I like about the duration is the May options won’t expire before Bed, Bath and Beyond announces their next earnings in April. However, if the Smart Money is going to be right, price must breach the weekly demand at $14.50.

Needless to say, the Smart Money got this one right as well as price breached the weekly demand at $14.50 before the May put options expired.

The Smart Money is at it again. Yesterday I noticed the Smart Money bought over 10,000 put options expiring on September 20th.

Based on the previous measured move, the more recent leg down has ended. However, never bet against the Smart Money as they are typically right most of the time. The become profitable at or below $7.70. Estimated profit is 3X-4X based on the at the money puts option premium.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

I wrote about Under Armour three months ago,

Can Under Armour Return To The Glory Days???

Under Armour (NYSE: UAA) used to be the IT company on Wall Street with years of sales growth great than 20%, but things went left in 2017 when sales started slowing down. The end result was company struggled to manage inventory and saw margins decline when it had to sell surplus product at heavy discounts.

That’s when Under Armour put together turn around strategy which focused on inventory control and implementing a whole new strategy for product development.

Price is clearly in an uptrend based on price making higher lows. However, based on the immediate levels in play, the weekly zones, the turnaround story might be short lived.

Under Armour reported second-quarter results on Tuesday that didn’t quite meet Wall Street expectations.  Although they the company maintained their forecast for the full year and international sales grew in the low double digits, revenue in North America grew only 1.5%.  Needless to say the stock price sold off on the news, just $0.44 away from the bottom of the weekly supply at $26.

The company attributed the lackluster results were due to softer-than-expected demand in its direct-to-consumer channel, meaning lower traffic in physical stores and lower conversion rates online. Since price is in the middle of both weekly zones, the one of the better plays right now would be to put on a iron condor, if you can get the right amount of premium. However, because of the volatility collapse after earnings, you may have to go out at least three months to find the right amount of premium.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.