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Santa Claus Rally Eyed for Online Leaders Apple, Amazon and Google

Richard Suttmeier | Contributor
Wednesday, 21 Nov 2012 | 1:56 PM ET
CNBC.com

The big three tech-related names in today's headline hit the skids following third-quarter earnings reports, but recently held key technical levels.

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 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 earnings per share estimates by 17.2 percent, which accelerated the slide after a higher opening high at $706.70 on Oct. 19.

A test of the 200-day simple moving average (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 on 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. (Read More: Must-Have Apps for Black Friday Survival)

Amazon.com has a "buy" rating according to ValuEngine. 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 earnings per share estimates by 187.5 percent. 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.

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-percent increase in online sales this holiday season, and Amazon.com should be a major beneficiary as up to 25 percent 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. (Read More: Too Many Tablet Choices? How to Buy One This Holiday)

Apple has a "buy" rating according to ValuEngine. Apple set its all-time high of $705.07 on Sept. 21. Apple also announced quarterly results on Oct. 25 and reported a slight earnings per share miss of just 1.4 percent.

On Nov. 2 Apple failed to hold its 200-day SMA then at $590.33. Last week I had a weekly pivot at $538.56, which provided a level at which to buy on Thursday.

Consider booking profits on strength to the five-week MMA at $586.46. Away from these moving averages I show weekly and semiannual value level at $487.12 and $481.73 with my quarterly risky level at $674.21.

Even Apple announced worldwide Black Friday sales featuring iPads, iPods and Mac gifts. Last year their deals included $101 off on iMac, MacBook Pro and MacBook Air systems, but all you know about this year's Internet-based door-busters are on teaser pages at their online stores. (Read More: Apple Teases Its Black Friday Sale)

—By TheStreet.com Contributor Richard Suttmeier

Additional News: Apple Teases Its Black Friday Sale

Additional Views: Can HP Really Rebound by 2014?

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Disclosures:

At the time of publication, Richard Suttmeier held no positions in any of the stocks mentioned.

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