Thursday, November 7, 2013

Twitter Goes Public! Here’s How to Play Day #1

It's finally here. Twitter (TWTR) will be freely trading as a public company and the world will most likely resume spinning on its original axis. There's no stopping it now. Twitter's IPO has become a force all its own. Hundreds if not thousands of people are working behind the scenes to make sure this thing goes off without a hitch. It would be easier to stop a tsunami with a tennis racquet than it would be to stop shares of Twitter from hitting the floor of the NYSE on Thursday morning.

Zor Capital founder Joe Fahmy isn't expecting Twittter's IPO to be as catastrophic as Facebook (FB). "If this doesn't open $30, or even higher I'd be shocked," says Fahmy in the attached clip. After the Facebook debacle of 2012, the investment banks have too much riding on Twitter to let it fail. However amoral they may be, the fact is it's not in the bankers' best interest to see Twitter get crushed. A Twitter crash would be bad for the IPO franchise and the banks have other companies they want to take public after Thursday. It's taken 18-months to get the public excited about another social network IPO. To the extent possible the banks need this to go well. "They want to make a point," as Fahmy puts it.
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Francesca's Holdings (NASDAQ: FRAN) is Poised for 50% Gains in 2014

As summer wrapped up, consumers' moods grew sour. Fears of a looming government shutdown led many to simply stop spending on discretionary items, leading to a cycle of lower profit forecasts for a number of retailers.
Few appear to have been as hard hit as women's apparel and accessory retailer Francesca's Holdings (NASDAQ: FRAN). In early September, Francesca's announced that same-store sales, which had been growing at a fast pace ever since its July 2011 IPO, had suddenly turned negative.
Investors were in an unforgiving mood, and shares fell sharply to a 52-week low.
News of the sudden sales slowdown led many to question if this once-hot retailer was still capable of robust growth. Sales had risen 45% in fiscal 2013 to nearly $300 million, leading to a 100% spike in 2013 earnings per share (EPS). Though analysts had been expecting another banner year in fiscal 2014, they now expect FRAN to boost sales only 17% (based entirely on new store openings) and grow EPS less than 10%.  (more)

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This Is The Single Greatest Danger Facing The World Today / November 6, 2013
On the heels of many global stock markets hitting new all-time highs, today a man who has been trading major markets for over four decades spoke with King World News about the greatest single danger facing the financial world today.  Below is what James Turk had to say in this tremendous and timely interview.
Eric King:  “Art Cashin was writing (on KWN) about the danger of the Fed losing credibility, and there’s really no way to print your way out of that.”
Turk:  “Yes, I agree with that.  Not only is the Fed losing credibility, but their balance sheet is making the Fed look increasingly insolvent.  Remember, the Federal Reserve got rid of all of its short-term government paper.  All it owns now is long-term paper….
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Let’s Talk About Palladium

This is one that doesn’t get a lot of attention. I love that.
When we take a look at metals, whether base or precious, I think it’s important to start with where the strength is. Here is a one-year chart of all of your favorite metals: Gold, Silver, Platinum, Copper and Palladium. There are some others out there like Nickel, Lead and Zinc, but today we’ll stick with the easiest ones to trade. These are the ones that I look at most frequently anyway.
Notice the strength in Palladium over the past year. While precious metals like Gold and Silver have been crushed, down 22% and 31% respectively, Palladium is dominating the metals market – up 24% over the last year:
I think this comparison chart is the perfect place to start the analysis in metals. Now that we know where the relative strength is, we can look at a price chart of Palladium. It’s not surprising that this thing looks beautiful on a longer-term timefame. Here is the weekly chart showing a nice 3-year consolidation after over a 400% move from the 2008 bottom:
11-5-13 pa
What stands out to me is how symmetrical this consolidation has been. I love clean charts, and this is one of them. The fact that prices are trading nicely above rising 50 and 200 week moving averages is further evidence of strength, both absolute and relative. Pull up the charts of the other metals, they don’t look like this.  (more)

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Tyson Foods, Inc. (NYSE: TSN)

Tyson Foods, Inc., together with its subsidiaries, engages in the production, distribution, and marketing of chicken, beef, pork, prepared foods, and related allied products worldwide. It operates in four segments: Chicken, Beef, Pork, and Prepared Foods. The company's Chicken segment breeds and raises chickens; and processes live chickens into fresh, frozen, and value-added chicken products. Its Beef segment processes live fed cattle; fabricates dressed beef carcasses into primal and sub-primal meat cuts and case-ready products; and sells hides and meats. The company's Pork segment is involved in the processing of live market hogs and allied products; and fabricating pork carcasses into primal and sub-primal cuts and case-ready products. Its Prepared Foods segment manufactures and markets frozen and refrigerated food products, such as pepperoni, bacon, beef and pork pizza toppings, pizza crusts, flour and corn tortilla products, appetizers, prepared meals, ethnic foods, soups, sauces, side dishes, meat dishes, and processed meats.
To review Tyson's stock, please take a look at the 1-year chart of TSN (Tyson Foods, Inc.) below with my added notations:
1-year chart of TSN (Tyson Foods, Inc.) TSN has formed a key level of support at $28 (blue) over the last (3) months. In addition, the stock has created three lower peaks (red) starting in the middle of August. These two occurrences combined have TSN stuck trading within a common chart pattern known as a descending triangle. At some point, the stock has to break support or break its string of lower highs.

The Tale of the Tape: TSN has formed a descending triangle pattern. A short trade could be made on a break of the $28 support. A break through $30 would break the streak of lower highs and would set up a potential long trade.
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Delek US Holdings (NYSE: DK) : Is It Time For A Turnaround In Refineries?

It was a tough summer for U.S. refiners. Profit margins have come under pressure as oil prices moved higher because of geopolitical tensions, while at the same time, prices for refined products such as diesel and gasoline have been relatively tame. As a result, refiners had to pay higher prices for input costs (crude oil) without a corresponding revenue increase for refined products sold.

Another challenge for U.S. refiners has been the WTI-Brent spread. This is the difference between U.S. domestic West Texas Intermediate (WTI) crude oil and a comparable barrel of European Brent oil. Over the summer, a narrowing of this price differential eroded U.S. refiners' price advantage, sending stock prices for these refiners 20% to 50% lower. The narrowing of the price differential was a result of supply disruptions from Canada and record U.S. refinery demand.

But the trends have recently shifted, and the WTI-Brent spread has once again widened. Supply disruptions in Libya and Iraq have supported Brent prices, while WTI prices have declined. The futures markets are now pointing to a wider expected crack spread (the difference between crude oil and refined petroleum products), which in turn should lead to higher profits for U.S. refiners.  (more)

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