Minyanville's Before The Bell: Energy Surge, Tech Surprise, Futures Are Up
Crude Oil continues to surge and Microsoft surprises Wall Street. Futures are pointing higher.
The WSJ reports crude oil hit a new high, breaking above $92 a barrel amid rising tensions in the Middle East and supply falling behind demand. While oil still remains, in real terms, below the all-time record of $101.70 set in 1980, the price of crude oil futures have increased almost 50% year-to-date. Read a conversation between Professor Kevin Depew and Professor Ryan Krueger in Is The Market Turning? What About Energy? Also look to Professor Kreuger's The Benefits of Higher Prices (Yes, Benefits).
The Bull Pen: Energy bulls may look to the Oil ETF (USO) with sell-stops below the recent high ($68) or, for those with more risk tolerance, the summer uptrend ($64).
The Bear Cave: The oil service stocks couldn't rally yesterday despite the jump in crude, much like we saw last Thursday before they spilled. Smith International (SII) is a worthy short candidate with a stop above $68 (breakdown level and 50-day).
Microsoft (MSFT) shares surged the most in recent years as it reported 1Q profits of $0.45 per share, beating estimates of $0.39. Revenues rose 27.3% year-over-year to $13.76 bln versus $12.54 bln consensus. After years of lackluster performance, the numbers surprised Wall Street, sending the stock surging 11.8% in yesterday's after-hours trading. Tech performances were not exactly stellar yesterday, but read Professor Sean Udall's Tech Down But Not Out.
The Bull Pen: Microsoft broke a triple top with the move through $32. The textbook time to buy a breakout is when a stock retests that level, setting a tight stop below.
The Bear Cave: Tech bears who consider MSFT an earnings play, and not a play on the overall sector, may look for continued correction in Tech with a play on the inverse Tech ETF (REW); sell-stops below 49.5, a point and figure double bottom break. UltraShort Technology ProShares correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Technology Index. This allows one who is bearish the sector to commit half the capital to the idea, as opposed to over-leveraging.
For more company-specific idea, click on Minyanville's Stocks To Watch.
A Quick Check Around the World
Asian markets were mostly up with the Hang Seng +1.84%, Nikkei +1.36%, Korea's Kospi +2.6%, Taiwan's TAIEX +0.66%, Shanghai +0.49%, and India's Sensex +2.56%.
Markets in Europe are mixed with the CAC -0.08%, DAX +0.02%, FTSE +0.18%, Swiss Mkt -0.43%, ATX +0.92% and Stockholm -0.45%.
As of 9:00 AM EST, S&P futures are trading +8 points, and Nasdaq futures are up +15 points.
A Look At Commodities
Crude oil is currently trading up +0.84 to 91.29. Metals are strong. Gold is up +8.6 to 779.6, Silver is up +0.25 to 14.15, and copper is up 0.034 to 3.52. The dollar index (DXY) is down -0.18 to 77.09.
On the Radar
At 10:00 AM EST, the Michigan Sentiment is due with estimates at 82.3 cons.
Click here for Minyanville's full Trading Radar.
TGI Friday Minyans! Good luck and have a great day!
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