Monday, August 3, 2015

Trade of the Day: Bank of America Corp (BAC) Stock Could Return 30% by Year End

Bank of America Corp (BAC) This is the second largest U.S.-based financial holding company with more than $2 trillion in global assets.
Capital IQ recently raised its 12-month price target on BAC stock by $1 to $20, maintaining a “buy” rating on shares. Its analysts were encouraged by the shakeup of the bank’s management team.
Following a meeting with Bank of America’s new CEO and CFO, Credit Suisse Equity Research said it believes the bank can grow revenues, become more efficient and increase shareholder returns. Its analysts have an “outperform” rating on BAC stock. (more)

Hershey (NYSE: HSY) Breakout, Time To Buy?

As the stock market spews volatility in the face of a Chinese rout, continued Greek uncertainty and economic reports that may change the Federal Reserve's plans, it is getting difficult to sleep at night. 
However, as per their unofficial mandate, consumer staples stocks are acting like a welcome island of calm in the storm. This sector has been outperforming the broader market all summer and has even made an arguable technical breakout.  (more)

A Breakout In Cotton Is Looming

Cotton Futures--- Cotton futures in the December contract are trading below its 20 and 100 day moving average hitting a 4 week low in today’s trade, however the chart structure is still poor at this time and if you been reading any of my previous blogs I have not traded cotton in 2015 as prices have gone nowhere so I’m still avoiding this market at the current time.
Cotton prices are at major support and there could be a possible recommendation coming up in the next couple of days especially if the chart structure or monetary risk is reduced as concerns about China slowing down is putting pressure on cotton prices currently. The problem with China is that they are the largest importer of cotton in the world and hold around 50% of the world reserves so the reality is they won’t be importing much cotton therefore reducing demand as it looks to be another outstanding crop in the southern part of the United States as harvest will begin in about two months increasing worldwide supplies so keep an eye on this market as we could be in a short position later next week.
Traders are awaiting the August USDA crop report which should send volatility back into this market as there’s very little volatility at the current time. TREND: LOWER –CHART STRUCTURE: POOR

Tiffany & Co. (NYSE: TIF)

Tiffany & Co., through its subsidiaries, designs, manufactures, and retails jewelry worldwide. Its jewelry products include fine and solitaire jewelry; engagement rings and wedding bands to brides and grooms; and non-gemstone, sterling silver, gold, and metal jewelry. The company also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances, and accessories. In addition, it wholesales diamonds to third parties. The company offers its products through retail sales, Internet and catalog sales, business-to-business sales, and wholesale distribution. As of January 31, 2015, it operated 295 stores, including 122 stores in the Americas, 73 stores in the Asia-Pacific, 56 stores in Japan, 38 stores in Europe, 5 stores in the United Arab Emirates, and 1 store in Russia.
Take a look at the 1-year chart of Tiffany (NYSE: TIF) below with added notations:
1-year chart of Tiffany (NYSE: TIF)
After a big drop in January, TIF started trading sideways over the following 4 months. The stock then jumped higher in May and has traded sideways, again, since. While in the most recent sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
TIF’s rectangle pattern has formed a resistance at $95 (red), which has also been key to the stock in the past, and a $90 support (green) that was a key resistance during TIF’s previous sideways move. At some point the stock will have to break one of the two levels, and if the $95 resistance breaks, traders should look for a run back up to the $100 level (blue).

The Tale of the Tape: TIF is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $90 or on a breakout above $95. The ideal short opportunity would be on a break below $90.

US Weekly Economic Calendar

time (et) report period ACTUAL forecast previous
8:30 am Personal income June   0.3% 0.5%
8:30 am Consumer spending June   0.3% 0.9%
8:30 am Core inflation June   0.1% 0.1%
9:45 am Markit PMI July   -- 53.8
10 am ISM July   53.7% 53.5%
10 am Construction spending June   0.8% 0.8%
TBA Motor vehicle sales July   17.3 mln 17.1 mln
10 am Factory orders June   2.0% -1.0%
8:15 am ADP employment July   -- 237,000
8:30 am Trade deficit June   -$42.7 bln -$41.9 bln
10 am ISM manufacturing July   56.5% 56.0%
8:30 am Weekly jobless claims Aug. 1   268,000 267,000
8:30 am Nonfarm payrolls July
215,000 223,000
8:30 am Unemployment rate July   5.3% 5.3%
8:30 am Average hourly earnings July   0.2% 0.0%
3 pm Consumer credit June   -- $16 bln