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Here’s your weekly Investing Action Plan: what you need to know as an investor for the coming week.
XAutoplay: On | Off Apple (AAPL) will hold its annual Worldwide Developers Conference, where management typically unveils what has already been leaked to the tech media and blogosphere. There could still be some surprises. But looming over the gadget chatter as well as earnings from highly rated companies Ambarella (AMBA), Dave & Buster’s (PLAY) and HealthEquity (HQY) is the possibility of new political bombshells. Ex-FBI Director James Comey will testify on Thursday, which is also when the U.K. will hold a snap election.
Stocks To Watch
As the major indexes continue to climb to new all-time highs, many quality stocks are now extended. Here’s a look at five top stocks still presenting actionable trading opportunities.
Facebook (FB): The FANG stocks have been some of the market’s top performers of late, and Facebook is no exception. The social media giant has been on a nice run, now up 18% since breaking out of a cup-with-handle base in late January. After taking a trip to the 50-day line in mid-May, shares could now be forming another proper base in the near future. A flat base consists of at least five weeks of trade, and Facebook will hit that mark on Wednesday. The entry point would be 153.70.
Taiwan Semiconductor (TSM): Apple chip supplier Taiwan Semiconductor has cleared a three-weeks-tight entry at 35.90. The action comes shortly after shares broke past a flat-base buy point of 33.63 on May 2. When a stock clears a three-weeks-tight entry, which is available to investors with an existing position, make sure to buy the stock as close to the buy point as possible. To avoid chasing the stock, this pattern does not have the same 5% buy zone as the common base patterns.
Universal Display (OLED): After a big gap-up in early May on an earnings report that showed 450% bottom-line growth, the stock has formed a three-weeks-tight pattern. The buy point here is the high of the base, which is 118.30. Universal Display is a supplier of technology and materials for organic light-emitting diode (OLED) displays, with Samsung being one of its key customers. The OLED market is set to expand as the Apple iPhone 8 is expected to have an OLED screen.
Dave & Buster’s: The restaurant-arcade hybrid is trading above a four-weeks-tight entry ahead of its quarterly report on Tuesday. The entry point here is 68.35. Shares are already extended 18% from a flat base cleared in mid-February.
Delta Air Lines (DAL): Delta is back above a handle buy point of 50.28, rising 3% Friday. Delta on Friday reported a May passenger unit revenue increase of 3.5%.
Apple Seen Debuting Smart Speaker
The consumer electronics giant reportedly has begun production on a voice-response smart speaker that will use its Siri personal assistant. Apple could announce the product at its Worldwide Developers Conference, which starts Monday in San Jose, Calif. The device would compete with Amazon‘s (AMZN) Echo speakers and Alphabet‘s (GOOGL) Google Home speaker. Also at WWDC, Apple is expected to show off iOS 11, the next version of its mobile operating system, and new health-focused software for the Apple Watch. Apple also could introduce upgraded Mac computers and a new Apple TV set-top box, analysts say.
Markets May Go Nuts Again Over ‘Nut Job’
Just a month after President Trump fired him, the ousted FBI chief will appear before the Senate Intelligence Committee, where he is expected to say that Trump asked him to end an investigation of former National Security Adviser Michael Flynn. Comey is also expected to address reports that Trump sought his loyalty amid the FBI’s probe into possible collusion between Trump’s associates and the Kremlin as well as reports that Trump called him a “nut job.”
Remember that on May 17 the Dow Jones industrial average suffered its worst drop since September following reports that Comey wrote a memo alleging Trump wanted him to quash the Flynn probe. Markets could be headed for another bout of volatility if more damaging details come out of Thursday’s public hearing, which will be followed by a closed-door session. However, given the special counsel’s investigation, Comey may not be able to share that much.
More Anarchy In The U.K.?
Britons will go to the polls on Thursday, after Prime Minister Theresa May called a snap election in April, gambling that a vote three years early would result in a bigger Conservative majority and strengthen her hand as she negotiates Britain’s exit from the European Union. At the time, public-opinion surveys indicated that scenario would play out. But polls since then have suggested a narrower victory for the Conservatives, with one even showing the Labour Party winning. Given that the U.K. has formally started the Brexit process, a Labour win is unlikely to result in a take-back. But a slimmer Conservative majority or a hung Parliament where no party holds an outright majority could mean the difference between a “hard” Brexit and a “soft” Brexit.
Ambarella To Report After Recent Warning
The developer of video compression and imaging processing chips is scheduled to release Q1 results after the close Tuesday. Analysts expect EPS to rise 6% to 36 cents as sales climb 11% to $63.5 million. Drone maker DJI and action-camera vendor GoPro (GPRO) are among its big customers, but its fastest-growing markets are security and automotive cameras. Pacific Crest recently downgraded Ambarella, saying DJI may have incorporated a competitor’s technology in its news $499 Spark drone, which could be a “material headwind” for earnings over time.
Can Dave & Buster’s Stay Ahead?
The entertainment and dining chain reports Q1 earnings late Tuesday. Dave & Buster’s is expected to report EPS of 82 cents, up 14%, on revenue of $300 million, up 15%. The higher-margin games segment has helped the company outperform a restaurant industry that has struggled with discounts, cheaper groceries, inclement weather and weak retail traffic. While shares have cleared an alternative entry of 68.25, they are also near profit-taking sell territory from their prior 58.35 buy point.
Cancer Treatment Conference
Cancer heavyweights including Eli Lilly (LLY), Novartis (NVS), Merck (MRK) and Bristol-Myers Squibb (BMY) are slated to present data through Tuesday during the American Society of Clinical Oncology conference in Chicago. Bristol-Myers and Merck are on tap to present data from trials of their immuno-oncology drugs Opdivo and Keytruda. Lilly, Pfizer (PFE) and Novartis are on deck with more from breast cancer trials involving their rivaling drugs. And the ovarian cancer landscape could see some movement as Tesaro (TSRO), Clovis Oncology (CLVS) and AstraZeneca (AZN) offer findings from separate studies of their drugs Zejula, Rubraca and Lynparza.
HealthEquity Eyes Breakout Ahead Of Report
The health savings account administrator reports Q1 results late Tuesday, and consensus estimates call for EPS of 16 cents, up 6.7%, on sales of $55 million, up 25%. HealthEquity (HQY) stock has rocketed 77% in the past year as its has grown its subscriber network of health plans and large employers, and shares are nearing a 49.35 buy point. Analysts also see bright growth ahead as the company continues to refine its online platform and offer other services, such as Web-based automated investment advice.
Whiskey Giant Won’t Mix Liquor And Beer
Brown-Forman (BFB) will report quarterly earnings Wednesday, and analysts expect the Jack Daniel’s maker’s EPS to dip 2% to 41 cents and sales to fall 20.8% to $738.5 million. Corona beer maker Constellation Brands (STZ) reportedly made an offer for the company last month, but Brown-Forman rejected the bid, saying it wasn’t interested in selling.
Top Names At Tech Conferences
Executives from VMware (VMW), Micron (MU) and Juniper Networks (JNPR) will speak at Stifel’s Technology, Internet & Media Conference on Monday. Citrix‘s (CTXS) officials will speak Tuesday. Workday (WDAY), 3D Systems (DDD) and Tableau (DATA) will present at the Bank of America Merrill Lynch’s Global Technology Conference Tuesday.
HD Supply’s Turn To Confront Amazon
The industrial-products distributor reports Q1 earnings on Tuesday, and analysts expect EPS to surge 28% to 65 cents, as revenue increases 5% to $1.861 billion. RBC Capital Markets said things to watch include any commentary on how protected HD Supply (HDS) is from Amazon (AMZN), whose Amazon Business unit seeks to tap into the industrial-supply market. RBC also said it would be looking for more detail on HD Supply’s thoughts about its Waterworks business – a segment that distributes pipes, hydrants, storm drains and other water-related products that company was reportedly considering putting up for sale.
ECB, Economic Indicators
The European Central Bank meets early Thursday, and analysts expect policymakers to begin addressing the possibility of tapering its monetary easing, especially given that the results of France’s presidential election have removed a major source of uncertainty. On Thursday evening, China will release consumer and producer inflation figures for May.
In the U.S., the Institute for Supply Management’s May nonmanufacturing survey and the Fed’s Labor Market Conditions Index will be out on Monday. The Labor Department’s Job Openings and Labor Turnover survey for April will come out Tuesday. The Fed’s April consumer credit report and the Philly Fed’s Livingston Survey are due on Wednesday.