Börsipäev 22. november
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Rev Shark:
Work Cut Out for Us
11/22/2005 8:59 AM EST
"The place where optimism flourishes most is in the lunatic asylum."-- Havelock Ellis
The market has been so strong lately it would be crazy not to feel a little concerned about how much longer this run can last. As is so often the case, we don't want to be overly anticipatory and look for a downturn when the momentum is running hot and heavy.
It is extremely important to maintain your objectivity in a market like this. The minute you start to think we have no where to go but up you are setting yourself up for a painful lesson in the contrary power of the market. The one thing that the market gods frown upon the most is certainty.
The proper market approach here is one of cautious optimism. The technical action is good, momentum is hot, the dip buyers are aggressive, performance anxiety is running high and we are in one of the best times of the year seasonally. There are a lot of positives to be found.
However, there are also some warnings signs we need to watch carefully so that we can hit the eject button if the tide turns. Foremost is the rather extended position of the indices. We have been going straight up with nary a rest and that increases the chances of a sharp reversal. We have to watch carefully to make sure pullbacks and profit taking don't turn into a freefall. If the dip buyers suddenly decide to hibernate and bids dry up we can fall fast and hard and give back many days of hard-fought profits.
Another concern here is the state of market leadership. Yesterday the precious metals and oil stocks led the market while semiconductors struggled. We need strength in groups like technology, retailers and banking for the market to continue to make a sustained run. Gold at nearly $500 an ounce is not a positive for the broader market.
While we should take some comfort in the market positives, we also need to keep our vigilance high. Hanging on to the majority of your gains when the market does turn down is what will separate average returns from superior ones. We have our work cut our for us as we continue to walk the high wire.
We have a soft open shaping up. Overseas markets saw some profit taking and oil and gold are continuing their run.
Gary B. Smith:
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CIBC initiates Activision (ATVI 14.98) with a Sector Perform saying they expect ATVI to gain market share on next-gen video games as it expands its slate of big propositions, leverages existing intellectual property and offers a solid launch slate on the Xbox 360; however firm will wait for a lower price to get more acitive
CIBC initiates Take-Two (TTWO 18.35) with an Outperform and $22 tgt saying despite recent mis-steps, TTWO holds one of the industry's most valuable franchises, Grand Theft Auto, and they don't believe current valuation reflects this
CIBC initiates Electronic Arts (ERTS 58.38) with and Outperform and $69 tgt as they view ERTS as one of the best positioned companies in the group to leverage growth on next-gen systems and high-end hand-helds given its Sports business, launch slate, wide focus and financial resources
CIBC initiates THQ Inc (THQI 23.47) with a Sector Perform saying that given THQI's dependence on its current-generation platform, the price cuts expected in the future could affect the co in the medium term if its next-gen game rollout lags competitors
BofA initiates V.F. Corp (VFC 55.57) with a Neutral, saying they prefer WRNC and RL
Merrill upgrades Micron (MU 14.20) to Buy from Neutral
Legg Mason downgrades Tiffany (TIF 42.90) to Hold from Buy on valuation, saying that as TIF moved past their existing $42 tgt, they believe several factors are now "in the stock".
ThinkEquity raises their Bankrate (RATE 31.32) tgt to $37 from $30 and increases their 2006 numbers following the co's accretive acquisitions
