It feels like it’s Groundhog’s Day here in New York City as another foot of snow has blanketed the city, but nothing can stop the T3Live crew from bringing you the most important news and notes of the day. Futures are near flat this morning with some economic data and more big earnings in focus.
For starters, S&P downgraded Japan’s sovereign debt overnight, weighing on the futures. Ahead at 8:30 ET are initial and continuing jobless claims. Recent data has been positive, with the housing market boosted by yesterday’s new home sales data. Tomorrow we will see important GDP figures.
On the earnings front, bellwethers Caterpillar Inc. (CAT), Bristol-Meyers Squibb Co. (BMY), Colgate-Palmolive Co. (CL), Eli Lilly and Co. (LLY) and Proctor & Gamble Co. (PG) are reporting earnings before the open today. After the close, tech giants Microsoft Corp. (MSFT) and Amazon.com, Inc. (AMZN) are set to report.
Fertilizers Reward The Faithful
Fertilizer stocks bounced yesterday and continued overnight after our favorite in the group, Potash/Corp. of Saskatchewan (POT), announced a 3-for-1 stock split to boost liquidity (effective Feb. 25) and that it would more than double its quarterly dividend due to its confidence in the crop nutrient market. POT is trading 3% higher after hours following the news, which is also perceived as a sign of strong earnings on the way this morning. We have been pounding the table to buy the dip in the ferts, and today we are rewarded for our faith.
Potash sales jumped 80 percent last year to 52 metric tons, driven by imports from BRIC countries Brazil, China and India with rapid population and affluence growth. “The doubling of our dividend reflects the confidence we have in the long-term drivers of our business and further commitment to using our strong cash flow to create value for our shareholders,” Potash Corp. CEO Bill Doyle said in the statement.
The split and dividend come after many soured on the sector following Cargill’s decision to offload its 64% stake in The Mosaic Company (MOS). The company, one of the largest privately held in the country, had many assets it could have offloaded to fund the family’s many charitable trusts, so the decision to dump MOS was curious. But we will happily take your shares, Cargill, as potash suppliers continue to charge higher in 2011.
Netflix Soars; Watch Semiconductors
Last night after the close tech monster Netflix, Inc. (NFLX) issued another stellar earnings report, and is trading nearly 15% higher after hours. After hours trading is difficult, but Marc Sperling of T3Live.com says its possible to have success with it if it fits into your overall strategy. (Watch the video, Marc shot it last night and almost perfectly predicted follow-through in NFLX post-earnings)
The semiconductor sector is one that was out of favor for momentum traders for a bit, but has some great set-ups right now. The name to watch closest, is Novellus Systems, Inc. (NVLS), says Sperling. The stock is showing great strength after strong earnings, refusing to dip more than 50% of its potent green bar from last week. Sperling believes you can get aggressive above $36.30 for new highs.
Las Vegas Sands Corp (LVS) also has a great pattern, consolidating for months after a strong long term move from under $2. After bouncing off support, you can get a great risk-reward trade in this casinos stock.
For more individual stock commentary, check out Scott Redler‘s daily Pricepoint Sheet.
Magnet Buying Opportunity in ACTG Near Support
Solid performance by the market on Wednesday with the advance-decline line almost 3 to 1 positive. The rally was broader based with tech, materials and commodities, large, mid, and small cap all participating. After a brief period of select profit taking, money was being put back into the market as confidence returns. ‘Yes we can’ seems to be the prevailing message.
Several Top Ranked Magnets have been sitting on the lower range of the envelop and were attractive to add to positions yesterday, says Jordan Kimmel of T3Live.com. We really need to lay back ahead of most earnings, with not too many showing love after the release. Even small beats have been sold off, as it seemingly takes a blockbuster report to send stocks higher.
Crocs, Inc. (CROX) is an example of how oversold positions can be powerful when they start back up. The stock found a bottom earlier this week and has bounced nicely over the last two days. The stock should get back to 52-week highs over the next couple of months.
Nanometrics Incorporated (NANO), Amtech Systems, Inc. (ASYS), and IDT Corporation (IDT), are all coming off nice resting periods, and Kimmel says he has added to positions in those high-ranked Magnet stocks.
Acacia Research Corporation (ACTG) has tested patience as it has drifted lower on low volume. Near support here, it could be a tremendous buying opportunity.
Kimmel also initiated feeler positions in Alliance Fiber Optic Products (AFOP) and Cognex Corporation (CGNX).
One of the Magnet shorts, International Game Technology (IGT) responded nice off the bat with aggressive, heavy volume selling yesterday afternoon.
For the entire list of Jordan’s Magnet positions, visit the T3Live Virtual Trading Floor.
*DISCLOSURE: Scott is long LVS, MSFT, NFLX; Short SPY. Marc is long LVS, MSFT, NVLS. Jordan is long IDT, ACTG, NANO, AFOP, CGNX, CROX; Short SPY.
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