Thursday, March 12, 2015

Nimble Storage Inc (NYSE: NMBL)

Nimble Storage, Inc. provides flash-optimized hybrid storage platform. The company’s software and storage systems handle various mainstream applications, including virtual desktops, databases, email, collaboration, and analytics. It offers systems that provide adaptive performance for high-input/output and high-capacity mainstream business applications and environments, such as Exchange, Oracle, SharePoint, SQL Server, virtual desktop infrastructure, and server virtualization. The company sells its products through a network of value added resellers and distributors to a range of industries comprising cloud-based service providers, education, financial services, healthcare, manufacturing, state and local government, and technology worldwide. Nimble Storage, Inc. was incorporated in 2007 and is headquartered in San Jose, California.
Take a look at the 1-year chart of Nimble (NYSE: NMBL) below with the added notations:
1-year chart of Nimble (NYSE: NMBL)
NMBL fell right off the cliff back in March, April and May before finally settling into a very long, sideways trend that has lasted about 10 months. During the sideways move the stock has shown a tendency to find repeated support at $25 (blue). Whenever that level was to break, the stock would fall to the next level down at $22 (red). NMBL is currently sitting right at $25.

The Tale of the Tape: NMBL has key levels at $22 and $25. A trader could enter a long position at $25 with a stop placed under the level. However, a short trade could be made instead if the stock were to break below $25 with the expectation of a fall down to $22. Another long trade could be considered if the fall to $22 were to happen.
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High Yield Bond ETFs: iShares iBoxx $ High Yield Corporate Bond ETF (HYG), PowerShares Fundamental High Yield Corporate Bond (PHB), Market Vector High Yield Municipal (HYD)

Yields on long-term Treasuries have fallen to very low levels. Partially as a result, we do not expect funds that invest in such debt to produce exceptional total returns again over the next 12 months.
Other types of investment-grade US bonds, including municipals and corporates, yield only slightly more than Treasuries, or even less. Their yields, too, are much lower than they were a year ago.
The yields of high-yield US corporate bonds are moderately more appealing. The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) recently had a 30-day SEC yield of 5.6%.
While not very high on an absolute basis, that’s not too skimpy relative to a yield of less than 2% on a 10-Year Treasury bond. Unless the US economy falls off a cliff, we expect high-yield bond funds to produce total returns in-line with their interest payouts in 2015, so, 5% or 6%. (more)

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Last Time This Ratio Spiked, Stocks Crashed / by Wolf Richter / 

Wholesale inventories-sales ratio spikes worse than in Oct. 2008

A month ago, when I last wrote about it, I half-figured, half-hoped that the lousy wholesale inventories and sales for December had been a fluke, that some numbers had gotten lost in the shuffle, that the trend would reverse in January. Now the January data is out. And it’s terrible.
This time, there weren’t any redeeming qualities left.
Inventories tie up cash. So inventory management has become a sophisticated obsession, tightly connected to sales forecasting. Merchants who are optimistic about sales prospects stock up for it. When these hopes turn into crummy sales, inventories begin to balloon, and the crucial inventories-sales ratio rises to ugly levels.

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Small-Caps Could Be Emerging As New Leaders

After underperforming the S&P500 for most of last year, the Russell2000 is approaching an important breakout level relative to its large-cap counterparts. Here is a daily ratio chart of the Russell2000 ETF $IWM vs the S&P500 ETF $SPY. Late last year, the ratio broke above its downtrend line from the highs last year. The next step is to start to put in higher highs. A break above the January highs would confirm that.
3-10-2015 1-37-18 PM iwm vs spy
What does this mean? Bigger picture it’s hard to take outperformance out of the “riskier” smaller-cap names as a bad thing. If there is real risk appetite out there for US Equities, we want to see money flowing into small-caps at a faster rate than into the less volatile, larger-cap stocks.
Aside from the broader market implications, a pair trade where one short the S&P500 in equivalent nominal amounts to being long the Russell2000, a breakout above this resistance would trigger that opportunity. Risk management-wise, I see no reason to be in this particular pair trade if the ratio is below the late January highs.
This is an interesting chart to watch. I came into the year looking for small and mid-cap stocks to outperform the large-caps. So far we are seeing this outperformance as we close out the first quarter. Moving forward, a breakout here would confirm this trend is likely here to stay.
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Youku Tudou Inc (NYSE: YOKU)

Youku Tudou Inc. operates as an Internet television company in the People’s Republic of China. Its Internet television platform enables consumers to search, view, and share video content across various devices. The company’s services for users comprise online video content library consisting primarily of professionally produced content, including television serial dramas, movies, current event reports, variety shows, and music videos. It also provides guided user-generated content through Youku Paike and Youku Niuren programs; and produces a range of content, such as sponsored Web serial dramas, reality shows, interviews, and variety shows under Youku Originals brand.
Take a look at the 1-year chart of Youku (NYSE: YOKU) with the added notations:
1-year chart of Youku (NYSE: YOKU)
YOKU seems to be trying to bottom out over the last 6 months while finding support at $16 (red) each time that level has been approached. Now that the stock is almost there again, traders should be able to expect some sort of bounce. However, if the $16 support were to break, much lower prices should follow.

The Tale of the Tape: YOKU has a key level of support at $16. A trader could enter a long position at $16 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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