Market Update #2 7-5-12

So here’s the setup…The ECB cut rates as expected and the ADP report was better than expected.  Also the jobless claims number was down and Central Bank of China has cut rates.  All the news is positive however the market can react in very strange ways even with positive news.  Since some investors were expecting QE3 (Quantitative Easing) because of the downward situation in Europe they may think that the Fed (Federal Reserve) will hold off on QE3 because of positive numbers in jobless claims and the other reports.

Bottom line…wait and see what the market does after the opening bell  

Stocks to watch:

SNE – Big release of Spider Man this week.  Target price 15.72 off of technical set up from the Daily chart

S (Sprint) – The technical setup looks good for Sprint.  I see a target price of $3.71 but if it breaks that level it could go higher

T – Dividend declaration at end of trading day

AAPL – British judge ruled against AAPL in its four patent infringement claims against HTC, they also are going to release a smaller ipad

Stocks to watch 7-1-12

Entertainment

http://www.bloomberg.com/news/2012-07-01/universal-s-ted-no-1-film-with-54-1-million-in-receipts.html?cmpid=yhoo

TWX – Time Warner

Release of “Magic Mike” this weekend exceeded expectations

CMCSA – Comcast

Release of “TED” this weekend exceeded expectations

GE – General Electric

Release of “TED” this weekend exceeded expectations (Comcast and GE co-own Universal Studios)

SNE – Sony Columbia Pictures

Spiderman release Tuesday may push stocks higher, however this stock has been on a downward trend since 2001.  It has done the typical up and down dance but I think it has possibly bottomed out.  We may be poised for an upside swing.  Sony just closed on buying half of EMI’s publishing catalog on Friday and tomorrow they will be offering their music library through Apple’s ipod and ipad.  All of these developments may make the stock a good buy tomorrow.

Yahoo article on publishing

http://finance.yahoo.com/news/sony-group-closes-2-2b-162924405.html

Morningstar article on publishing library

http://news.morningstar.com/all/ViewNews.aspx?article=/DJ/201207012005DOWJONESDJONLINE000185_univ.xml

Retail

DG - Dollar General

This stock has been on a run since the beginning of this year and even when all the other stocks were going south from the news in Europe, it has continued to grind higher.  We had a retracement on Wednesday last week and it pulled to a support level off the 100 day moving average.  It popped up the typical halfway point between the high and the low of the retracement and is poised to go either way tomorrow.  The bottom line is, if you think this stock is going to grind higher from positive news in the market then go long.  But if you think the value of the company is priced all the way in at these highs (which are the highest this stock has ever been) then go short.

An interesting article talking about DG being overvalued at these prices:

http://seekingalpha.com/article/693721-walmart-target-stock-buys-compared-to-dollar-general?source=yahoo

FDO – Family Dollar

This might be a better play than DG simply because it is cheaper.  I always believe in buying low and selling high.  FDO has gone down to a support level and is poised to go back up especially if the market as a whole has a jump tomorrow.

Here’s an article that gives more detail:

http://beta.fool.com/techjunk13/2012/06/29/another-value-play-opens-retail/6433/?ticker=FDO&source=eogyholnk0000001

I still like Walmart (WMT) even though I took profits on Friday and I may take another position tomorrow.  I also still like ATT (T) because of the technical setup.