Gamestop GME Stock Powering Up for a 20% Run

GameStop Corp. (GME) — Although this is a mid-cap stock, it is the largest U.S. video game and PC entertainment software retailer in the United States and has about 6,700 stores worldwide.

Capital IQ predicts sales will rise 3.2% in fiscal 2016 (ending in January), benefiting from releases that were delayed from the previous year. They also expect increased revenues from digital content and mobile devices as GameStop diversifies. For fiscal 2017, they predict revenue will increase another 1.6%.

Gross margins have always been high in this business, but Capital IQ expects them to increase even further to 30.1% in FY 2016, up from 29.7%. Earnings per share (EPS) are estimated to grow 12% to $3.90 in FY 2016 and another 15% to $4.50 in FY 2017.

Another positive is that management has stated they intend to continue a generous share buyback program. The company also pays an annual dividend of $1.44 per share for a current yield of 3%.

On July 7, GME stock broke from a multiple top followed by a breakaway gap from a bullish “V” consolidation. Very high volume and a strong MACD confirmed the breakout was genuine.

The target for the breakout is the multiyear high above $57, made in November 2013. It was at that time that it became apparent to analysts that GameStop would report almost $3 in annual earnings in January 2014, up from a loss of $2.13 in fiscal 2013. Representing just 14.6 times estimated fiscal 2016 EPS, my target of $57 appears readily attainable.

This would result in gains of more than 20%.

Ralph Lauren Corporation (NYSE: RL)

Ralph Lauren Corporation designs, markets, and distributes lifestyle products worldwide. The company operates in three segments: Wholesale, Retail, and Licensing. It offers apparel, including a range of men’s, women’s, and children’s clothing; accessories, which comprise footwear, eyewear, watches, fine jewelry, hats, belts, and leather goods, such as handbags and luggage; home products consisting of bedding and bath products, furniture, fabrics and wallpapers, lightings, paints, tabletops, and giftware; and fragrances. Ralph Lauren Corporation sells its products to department stores, specialty stores, and golf and pro shops, as well as through its retail stores, concession-based shop-within-shops, and its e-commerce sites. The company also sells its apparel, home, and other products through licensing alliances.
Take a look at the 1-year chart of Ralph (NYSE: RL) below with added notations:

After a rough slide in January, February and March, RL started trading sideways over the following 5 months. While in the 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.
RL’s rectangle pattern has formed a resistance at $140 (red) and a $127.50 support (green).  At some point the stock will have to break one of the two levels.

The Tale of the Tape: RL is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $127.50 or on a breakout above $140. The ideal short opportunity would be on a break below $127.50.

BNN Top Picks: Facebook $FB, Alibaba $BABA and Terraform Power $TERP

Rick Stuchberry, vice president portfolio manager, Richardson GMP
Focus: Canadian Large Caps and International ADR's
MARKET OUTLOOK:
We would like to remind everyone Apple has more cash than Greece has GDP. Do not lose focus on the bigger picture, the global economy is improving, and this is a hiccup of uncertainty. Greece cannot cause a contagion and hurt Europe further because the debt is consolidated into safe hands, it is merely a distraction. We have to take a step back and look at the moment of peak irrationality which occurred over the first half of this year. The bond markets have become so inflated that in some markets investors have actually invested in bonds with negative yields. This means investors have paid a government to loan that government their money. It is difficult to comprehend that investors willingly invested in losing investments, in order to secure safety. The bond market changes are causing the stock market to undergo a major transition. As the bond market begins to sell off, the income earning stocks within the market are joining in this sell off. The 20 Year U.S. Treasury is selling lower over the year, taking with it, the ZUT- utility ETF made up solely of income producing stocks. We think we are in the early stages of this correction and investing in Income is no longer safe. We still believe money will continue to flow into the stock market, but investors must be in the right investments within the stock market. We must move forward, and we believe the safest way to invest is in earnings growth. (more)

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Is another Bank of Canada interest rate cut on tap?

In a year when the Bank of Canada has already stunned markets with an out-of-left-field interest-rate cut, it’s hard to imagine another rate-setting decision by the central bank could match that sort of drama. But this Wednesday’s scheduled rate announcement from the bank could come a close second.
After a string a disappointing economic indicators that strongly suggested the Canadian economy had contracted for a second straight quarter, financial markets and central-bank watchers are abuzz with will-he-or-won’t-he anticipation: Will Stephen Poloz, the central bank’s governor, decide to follow up January’s surprise rate cut with another quarter-percentage-point reduction, to throw a life preserver to an economy that may (or may not, depending on whom you ask) have already sunk into a small recession? (more)

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Stocks To Watch: OHRP, KITE, VLTC, ATVI

OHR Pharmaceutical Inc (NASDAQ:OHRP) 67% real gains today, more to come this week based on the daily technical chart. The stock broke out into the gap area with Massive volume today and I expect a continuation of the move tomorrow. The MACD is curling up and the accumulation line is moving higher. Nice gap to fill. PS: Brean Capital analyst Jonathan Aschoff reiterated a Buy rating on the stock with a price target of $34. The technical chart above indicates that OHRP is ready for a huge bounce.

Kite Pharma Inc (NASDAQ:KITE) broke through that critical 66.50 level today on solid volume. The uptrend is intact and signals further bullishness on this stock. The stock hit a high of $69.99, which is resistance for Tuesday’s move. If the stock can break through resistance, we should see a follow through move. Watch the stock closely tomorrow.

Voltari Corp (NASDAQ:VLTC) ended Monday's trading session at 6.74, advancing 41% with the stock attracting 5.7 million shares. The stock shows signs of bottoming out with the recent up move from its 4-month low. The stock has also moved back from oversold zone and closed above all its EMAs for the first time since early June. There is a high probability for a trend continuation in the next sessions, as the stock could test the next key resistance level in the 7.50 area.

Activision Blizzard, Inc. (NASDAQ:ATVI) is again setting up for a potential swing trade. Breakout point at 26.09

Another Amazon AMZN Breakout to New Highs

While scanning the 41 stocks in the S&P 500 that are making fresh new 52-week highs right now, I wanted to highlight one stock in particular today.
Our good friend Amazon (AMZN) broke free above another sideways rectangle pattern in an ongoing uptrend.
Let’s pinpoint the breakout – on “Amazon Prime Day” – and see the current opportunity:

A quick glance at the Daily Chart shows us three recent “Sideways Rectangle” Price Patterns in an ongoing bullish trend.
Share prices broke – on a gap – two times in 2015 with strength as buyers dominated sellers.
After both breakouts, shares traded sideways into a Rectangle Pattern consolidation.
Price tends to impulse and then stall into a sideways range… but price eventually breaks free of sideways ranges into a future impulse move.
That’s likely what we’re seeing here with another breakout to new chart highs in the stock, and it creates an aggressive pro-trend breakout buying opportunity.
New traders tend to do better buying pullbacks – retracements – to support (like rising moving averages).
The risk of trading a breakout is that price forms a “Trap” where price initially breaks out… but then returns back inside the Rectangle.
That’s why we need to take our stop-losses that trigger if price does break initially but then return into the range.
Odds favor a retest of the Rectangle Support Low in the event of a trap triggering.
Nevertheless, continue following and trading “strong stocks getting stronger” in this ongoing bull market.

Trade of the Day: No. 1 Biotech Pick GILD Gilead on Sale

Gilead Sciences, Inc. (GILD) — I last covered GILD stock in the Trade of the Day on June 16. Since then, shares have fallen nearly 4%. Does the decline shake my confidence in this biotechnology giant? Absolutely not. GILD stock remains my No. 1 pick in the sector.
Capital IQ is confident that Gilead will maintain its dominant market position in the treatment of hepatitis C and continue to show significant sales growth despite competition. Its analysts put Gilead’s market share at 90% and believe it has only served an estimated 4% of the 6.6 million people with hepatitis C in the United States and some European countries. While competition is expected to increase, they note that Gilead’s Harvoni is physicians’ preferred treatment due to its ease of  (more)