Dr.PepperSnapple has popped big today after they announced that earnings grew 37.7% from the same quarter last year. It has traded as high as 26.38 (5.52% higher than where I recommended it) and now has pulled back to 25.77 (3% higher than where I recommended it). While some gains should've been taken on the pop (it is likely to give back some of today's gains in the near term), I continue to think that company is undervalued compared to its competitors and should make further gains in the intermediate term.
The yen dropped today against the dollar and euro and looks like it may have broken a short term support level. Furthermore the 10 year treasury note yield has rallied back strongly to 4.04% and may soon touch its recent high of 4.13% if this stock rally can continue. These two factors signal that risk appetite is coming back into the market as investors look toward higher yielding assets and stocks instead of risk free bonds. However, what makes the market's move even more impressive is that it did it in the face of a strong move in oil. All of these of moves bode well for the continuation of an upward move in stocks.
Right now I could see the S&P making another attempt at the 200 sma which is around 21 points above current levels. To play this, you may look at JCG (currently at 36.34) which put in a short term double bottom on Wednesday and has the potential for a snapback rally after being sold off 13 bucks over a very short time period.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment