Santa Claus Rally Eyed for Online Leaders Apple, Amazon and Google
It's time for another look as Black Friday sales accelerating short-term mojo could be the beginning of this year's Santa Claus rally led by these names.
Google (GOOG) ($669.97) has a buy rating according to www.ValuEngine.com, and was profiled Oct. 16 in Handicapping Key Earnings Reports. Google set an all-time high at $774.38 on Oct. 5 and was sliding going into its quarterly report on Oct. 18. Google missed EPS estimates by 17.2%, which accelerated the slide after a higher opening high at $706.70 on Oct. 19.
I updated this profile Oct 24 in Missed Corporate Revenue Signals QE Fatigue. In both stories I mentioned that Google was above its 200-day simple moving average.
A test of the 200-day SMA on the downside is almost always considered a buying opportunity for a buy-and-trade strategy. Google tested this moving average at $638.41 Friday. The upside is to the 50-day SMA at $709.21 given a weekly close above the five-week modified moving average at $680.90. My weekly value level is $659.15 with a monthly pivot at $679.57 and quarterly risky level at $713.85.
Google has improved shopping apps and updated Android maps for an enhanced holiday shopping experience. You can create shopping lists, view products with 360-degree views, find promotions and coupons, and use new maps for about 10,000 stores.
Amazon.com (AMZN) ($233.78) has a buy rating according to ValuEngine. I profiled the stock Oct. 23 in Apple, Amazon Face Tougher Scrutiny Reporting Earnings.
Amazon set a multi-year high at $264.11 on Oct. 14. Amazon reported quarterly results Oct. 25 with a much larger than expected loss missing EPS estimates by 187.5%. Investors liked the growth story and the stock popped from a $222.92 close that day to an opening high at $238.71 on Oct. 26. Investors and traders had the opportunity to reduce positions at my semiannual pivot at $236.23.
I updated this profile Oct. 30 in Trading Earnings Volatility and in both stories mentioned the annual pivot at $236.23 and that Amazon was above its 200-day SMA.
A test of the 200-day SMA at $219.57 occurred last Thursday, providing a buy-and-trade strategy. Now the stock appears ripe for a re-test of its semiannual pivot at $236.23, and above this pivot is the 50-day SMA at $243.84. A weekly close above the five-week MMA at $236.10 enhances the upside potential. My weekly value level is $218.67 with my semiannual pivot at $236.23 and quarterly risky level at $263.71.
Forrester Research projects a 12% increase in online sales this holiday season, and Amazon.com should be a major beneficiary as up to 25% of smartphone and tablet owners buy on their mobile devices. Sales of their Kindle products should be on "Fire" and their online Black Friday deals feature video games for Nintendo, PlayStation and Xbox 360 platforms.