Can Gilead Recover from 3Q?

Is Gilead Sciences (GILD) in correction mode?

Recently at $104.03, the biotech giant fell 2.7% today, extending a slide that began in late October when the stock hit a 52-week high. Gilead has since fallen 11%.

RBC analyst Michael Yee attributes the recent weakness to media reports about patents for a rival hepatitis C drug and comments about increased scrutiny from insurance companies regarding the use of new Hepatitis C therapies.

Yee writes:

To be clear, these types of comments may cause some headline concern but are not new. For example (1) please see our August 30, 2013 GILD report (“Looking at the ABBV HCV Patents…Seems More Bark Than Bite”). ABBV is claiming a patent for someone else’s drugs. A) GILD already has published and pending patents for this, B) in some instances GILD filed before ABBV (filing first typically can determine precedence); (2) the payor comments aren’t new, these drugs already required prior auth.

Gilead's share price has climbed almost 50% during the past 12 months thanks to fast-growing sales of its hepatitis C medication Sovaldi. Last month, Gilead received FDA approval for another hepatitis C medication known as Harvoni and analysts are closely tracking prescription trends.

In Late Oct., my colleague Teresa Rivas wrote bullishly on Gilead after sales of Sovaldi fell more than expected in the third quarter (see Barron's Take, "Gilead: Buy the Dip," Oct. 29).

 

JC Penney Drops 3.2% on Mixed 3Q Earnings

Investors aren't pleased with J.C.Penney's (JCP).

The department store chain fell 3.2% to $7.51 during after-hours trading, retreating from big gains during the day, after posting mixed fiscal third-quarter financial results. In short, the department store chain's third-quarter sales missed already reduced expectations but its earnings loss was smaller than expected. The press release can be read here.

The stock had surged 7.78% before the closing bell to close Wednesday at $7.76.

As Marketwatch reports:

Net loss narrowed to $188 million, or 62 cents a share, from $489 million, or $1.94 a share, in the year-earlier period. That beat the 81-cent FactSet consensus loss estimate. Sales dipped 0.5% to $2.76 billion, just shy of the $2.81 billion consensus estimate. Comparable-store sales were flat. That missed the 2.2% gain analysts surveyed by Retail Metrics were looking for. Analysts already cut their sales estimates after the company warned in October that sales would fall short. Gross margin widened by 7.1 percentage points.

JC Penney has made headlines in the past for its major ups and downs. Analysts are at odds over whether the company can pull off a major turnaround, with some arguing that long-term goals are too bullish.

"A first-half sales bounce appears to be fading, and the company's chances of hitting its long-term financial goals look wobblier than canned cranberry sauce," wrote Jack Hough in last weekend's issue of Barron's (see Ahead of the Crowd, "Penney's Turnaround Gets Tougher," Nov. 8).

In today's press release, JC Penny said it sees same-store sales rising 2% to 4% in the fourth quarter and rising 3.5% to 4.5% for the full fiscal year.

The company maintained its liquidity target for the full year at $2.1 billion and expects positive free cash flow.

At its Oct. 8 analyst day, Penney set a goal of $1.2 billion in Ebitda by 2017. The path for getting there includes lifting sales at longstanding stores by 5.4% a year, boosting gross margins, and holding spending flat.

Buy These 5 Breakouts to Beat the Market This Fall

BALTIMORE (Stockpickr) -- The big stock indices rung the bell at new closing highs yesterday, and they're pointing towards more of the same today. U.S. markets have basically been in straight up mode for the last three weeks now, rallying a whopping 9.4% since the middle of October.

Must Read: Warren Buffett's Top 10 Paying Dividend Stocks for 2014

And stocks are pointed slightly higher this morning...

Not that there's anything wrong with that. Many folks don't realize that new highs are Mr. Market's "normal mode" -- since 1982, almost half of all S&P 500 trading sessions have closed within 5% of all-time highs. That number even factors in huge market declines like 2008. Put simply, this market momentum isn't likely to want anytime soon.

But the market can be beaten. To do that, we're taking a technical look at five breakout trades to grab for gains this week.

For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

Without further ado, let's take a look at five technical setups worth trading now.


Must Read: Sell These 5 Stocks Before It's Too Late

 

Follow Jonas on Twitter @JonasElmerraji

AGL Resources

 

 

Up first is AGL Resources (GAS), a $6.5 billion natural gas utility. Utility stocks have been quietly working their way higher in recent months, showing better relative strength than any other sector in November And AGL Resources is no exception: it's up 15% since the calendar flipped to January.

 

But don't worry if you missed the move year-to-date -- shares are flirting with an important breakout level this week.

 

GAS has spent the last few months forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance above shares at $55 and uptrending support to the downside. Basically, as GAS bounces in between those two technical levels, it's been getting squeezed closer to a breakout above that $55 price ceiling. When that happens, we've got our buy signal -- and we're very close at the start of today's session.

 

How about that relative strength I mentioned a moment ago? It looks stellar in GAS -- in fact, this stock's relative strength line has held its uptrend since the start of the year, an indication that GAS is outperforming the rest of the market in good times and bad ones. As long as that relative strength uptrend remains intact, shares of GAS should keep outperforming.

 

If you decide to buy the next material move above $55, the 200-day moving average is a logical place to park a protective stop.


Must Read: 5 Stocks Insiders Love Right Now

 

Cobalt International Energy

 

 

Cobalt International Energy (CIE), on the other hand, hasn't had such a good run in 2014. Shares of this oil exploration company are down 38% since the start of the year, sold off along with the rest of the energy sector as commodity prices have cratered. But long-suffering shareholders could be in store for a reprieve in CIE this fall. Here's how to trade it:

 

CIE is forming a double bottom pattern, a bullish reversal setup that looks just like it sounds. The buy signal comes on a push through the peak that separates the two bottoms in CIE, up at the $12 level. In other words, if CIE can close above $12, then buying it becomes a high-probability trade again.

 

 

Discover Financial Services

 

 

You don't have to be an expert technical trader to figure out what's going on in shares of Discover Financial Services (DFS) -- the setup in this $30 billion payment services stock is about as simple as they get. And it's pointing higher this fall.

 

Discover is breaking out to new highs this week, but the real story comes from zooming out to the uptrend that's been in play all year long. The uptrending channel in Discover is formed by a pair of parallel trendline support and resistance levels that identify the high-probability range for shares to stay within. Put simply, every touch of trendline support has been a low-risk opportunity to get into shares. With shares in the upper third of the channel, it makes sense to wait for a pullback before piling into DFS, but, if history is any indication, investors' patience will be rewarded.

 

DFS' most recent swing low at $61 is a logical place to park a protective stop on this uptrend. If shares violate that low, then the uptrend in Discover is broken, and you don't want to own shares anymore.


Must Read: 5 Breakout Stocks Under $10 Set to Soar

 

WhiteWave Foods

 

 

We're seeing the exact same setup in shares of WhiteWave Foods (WWAV). Just like with Discover, WWAV has been bouncing its way higher in a textbook uptrending channel all year long. So now, it makes sense to wait to buy the next bounce off of trendline support.

 

Waiting for a bounce off of support is a critical test for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring WWAV can actually still catch a bid along that line before you put your money on shares.

 

$33 is a logical place to park a protective stop on the WWAV trade. A violation of $33 means that the uptrend is over...


Must Read: 10 Stocks Billionaire John Paulson Loves in 2014

 

Macquarie Infrastructure Company

 

 

Last up is Macquarie Infrastructure Company (MIC), a name that's looking to tack onto its 2014 gains with a breakout this week. MIC is forming a very non-textbook inverse head and shoulders pattern, a price setup that indicates exhaustion among sellers. Even though this isn't a textbook pattern, the trading implications are exactly the same here -- the buy signal comes on a breakout above this stock's neckline at $72.

 

Why all of that significance at that $72 level? It all comes down to buyers and sellers. Price patterns like the inverse head and shoulders are a good quick way to identify what's going on in the price action, but they're not the actual reason a stock is tradable. Instead, the "why" comes down to basic supply and demand for MIC's stock.

 

The $72 resistance level was a price where there has been an excess of supply of shares; in other words, it's a spot where sellers have previously been more eager to step in and take gains than buyers had been to buy. That's what makes a breakout above $72 so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level. Wait for $72 to get taken out before jumping in...

 

-- Written by Jonas Elmerraji in Baltimore.

Must Read: Hedge Funds Hate These 5 Stocks -- Should You?

 

Follow Stockpickr on Twitter and become a fan on Facebook.

 

At the time of publication, author had no positions in the names mentioned.

 

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

 

 

Mid-Day Market Update: Nu Skin Dips On Weak Forecast; EOG Resources Shares Jump

Related BZSUM Mid-Morning Market Update: Markets Open Higher; Time Warner Earnings Top Estimates #PreMarket Primer: Wednesday, November 5: Democrats Lose Control Of The US Senate

Midway through trading Wednesday, the Dow traded up 0.46 percent to 17,463.41 while the NASDAQ surged 0.16 percent to 4,631.15. The S&P also rose, gaining 0.45 percent to 2,021.13.

Leading and Lagging Sectors

In trading on Wednesday, utilities shares were relative leaders, up on the day by about 0.94 percent. Top gainers in the sector included NRG Energy (NYSE: NRG), up 3.2 percent, and NextEra Energy (NYSE: NEE), up 2.6 percent.

Technology shares rose by just 0.05 percent on Wednesday. Top losers in the sector included Pegasystems (NASDAQ: PEGA), down 13.4 percent, and HomeAway (NASDAQ: AWAY), off 11 percent.

Top Headline

Time Warner (NYSE: TWX) reported upbeat earnings for the third quarter.

The New York-based company posted a quarterly net profit of $967 million, or $1.11 per share, versus a year-ago profit of $1.18 billion, or $1.26 per share. Adjusted EPS rose to $1.22 from $0.91. However, adjusted earnings, excluding tax benefit, came in at $0.97 per share.

Its revenue climbed 3% to $6.24 billion. However, analysts were expecting earnings of $0.94 per share on revenue of $6.16 billion.

Equities Trading UP

Coupons.com (NYSE: COUP) shares shot up 28.09 percent to $15.94 after the company reported upbeat quarterly results.

Shares of Callidus Software (NASDAQ: CALD) got a boost, shooting up 14.16 percent to $15.56 after the company reported better-than-expected Q3 results and issued a strong revenue forecast.

EOG Resources (NYSE: EOG) shares were also up, gaining 6.67 percent to $96.30 after the company reported better-than-expected quarterly earnings and raised its production growth forecast.

Equities Trading DOWN

Shares of Albany Molecular Research (NASDAQ: AMRI) were down 22.34 percent to $17.61 after the company reported a Q3 loss of $0.02 per share on revenue of $62.47 million.

FireEye (NASDAQ: FEYE) shares tumbled 15.15 percent to $29.06 after the company reported downbeat third-quarter revenue.

Nu Skin Enterprises (NYSE: NUS) was down, falling 16.43 percent to $42.13 after the company issued a weak forecast for the current quarter.

Commodities

In commodity news, oil traded up 1.10 percent to $78.04, while gold traded down 1.70 percent to $1,147.90.

Silver traded down 2.68 percent Wednesday to $15.53, while copper fell 0.38 percent to $3.01.

Eurozone

European shares were higher today. The eurozone’s STOXX 600 climbed 1.65 percent, the Spanish Ibex Index climbed 1.14 percent, while Italy’s FTSE MIB Index jumped 2.60 percent. Meanwhile, the German DAX rose 1.63 percent and the French CAC 40 jumped 1.89 percent while UK shares climbed 1.32 percent.

Economics

The MBA reported that its index of mortgage application activity declined 2.60% in the week ended October 31, 2014.

Private-sector employers added 230,000 jobs in October, versus 225,000 in September. However, economists were expecting an addition of 220,000 jobs.

The final reading of Markit services PMI fell to 57.10 in October, versus a prior reading of 57.30. However, economists were expecting a reading of 57.10.

The ISM non-manufacturing PMI fell to 57.10 in October, versus a prior reading of 58.60. However, economists were expecting a reading of 58.00.

Posted-In: Earnings News Guidance Eurozone Futures Commodities Econ #s Markets

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Skullcandy Inc (SKUL) Earnings Report: Should Investors Be Listening? HAR & KOSS

The Q3 2014 earnings report for small cap audio stock Skullcandy Inc (NASDAQ: SKUL), a potential peer of other audio stocks like mid cap Harman International Industries Inc (NYSE: HAR) and small cap Koss Corporation (NASDAQ: KOSS), is scheduled for after the market's close on Wednesday (November 5th). Aside from the Skullcandy Inc earnings report, it should be said that Harman International Industries Inc reported Q1 2015 earnings on October 30th (net sales increased 22% to $1.4B and net income rose 37% to $92M thanks to robust demand for car audio products) while Koss Corporation reported Q1 2015 earnings on October 22nd (sales fell 19.9% to $5,469,486 as sales continued to be soft in Europe and there was a net loss of $94,998 verses net income of $79,402). Traders with long memories though might remember that in late 2012, Skullcandy Inc had the dubious distinction of being the market's most shorted stock (see: Long Live the Shorts or the Short Squeeze? SKUL, AM & UBNT) with short interest of 86.47%.

What Should You Watch Out for With the Skullcandy Inc Earnings Report?

First, here is a quick recap of Skullcandy Inc's recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:

Earnings HistorySep 13Dec 13Mar 14Jun 14

EPS Est	0.02	0.09	-0.17	0.01
EPS Actual	0.06	0.13	-0.12	0.06
Difference	0.04	0.04	0.05	0.05
Surprise %	200.00%	44.40%	29.40%	500.00%

EPS TrendsCurrent Qtr.
Sep 14Next Qtr.
Dec 14Current Year
Dec 14Next Year
Dec 15

Current Estimate	0.04	0.26	0.24	0.33
7 Days Ago	0.04	0.26	0.23	0.33
30 Days Ago	0.04	0.26	0.23	0.33
60 Days Ago	0.04	0.26	0.24	0.33
90 Days Ago	0.05	0.26	0.23	0.32

 

At the end of last July, Skullcandy Inc's reported net sales had increased 6.0% to $53.9 million as Domestic net sales increased 6.0% to $39.5 million while International net sales increased 6.1% to $14.4 million primarily due to increased sales in Canada, and to a lesser extent Mexico and China. Gross margin came in at 45.0% verses 44.9%; selling, general and administrative expense was $22.9 million verses $24.0 million; and net income was $1.6 million verses a net loss of $0.6) million. The CEO commented:

"We continue to excite our consumer through great new products combined with our authentic brand born from innovation, creativity, music, and sports. The successful actions the team has taken toward achieving our key objectives resulted in solid full priced selling and second quarter profitability that exceeded expectations. While we delivered a solid second quarter performance, I am even more excited for the back half of the year when we launch our ultra-secure Sports Performance line with Sticky Gel technology and bring to the market some of the most bombproof and fun wireless products on the market. Most importantly, the investments we are making in our team, culture, demand creation, and innovation, are positioning Skullcandy for long-term growth and sustained leadership."

On the news front and late September, the CEO of Skullcandy Inc was interviewed by The Street after ringing the closing Nasdaq bell. He said new product launches (e.g. Bluetooth and wireless headphones, take-anywhere speakers etc) ahead of the 2014 holiday season along with cleaned up distribution will help drive revenue and earnings for the company. He also pointed out that audio is a huge part of the lives of young people now.

In addition, UK based consulting and research firm Futuresource Consulting said worldwide shipments of headphones rose nearly 10% last year to reach 286 million units, with no end to the market growth in sight. They expect headphone shipments to rise 8% this year to 309 million units and then rising steadily for the next four years to hit 355 million units in 2018. Futuresource analyst Rasika Iyer stated: 

"We're seeing nothing short of a headphones renaissance… With prices ranging from less than $5 to more than $200 and a gamut of features, consumers have now started to purchase different sets of headphones for different applications, including commuting, sport and in-home listening. In Europe and North America, we're seeing headphone ownership reaching three to four pairs on average, though this includes headphones bundled with smartphones."

What do the Skullcandy Inc Charts Say?

The latest technical chart for small cap Skullcandy Inc shows a spike during the spring and a mild uptrend since the summer:

A long term performance chart shows that investors have been losers with small caps Skullcandy Inc and Koss Corporation while mid cap Harman International Industries Inc took off last year and well into this year:

A technical chart for Harman International Industries Inc shows conflicting trends while Koss Corporation has been in a pretty steady and nasty downtrend:

What Should Be Your Next Move?

Given how important audio has become, it might be worth it to revisit Skullcandy Inc or to take a close look at the coming earnings report and earnings call along with a few other stocks in the space like Harman International Industries Inc.    

4 Stocks Under $10 Triggering Breakout Trades

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

Must Read: Warren Buffett's Top 10 Dividend Stocks




Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.



Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.



With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Must Read: 5 Stocks Insiders Love Right Now

Eagle Rock Energy Partners

Eagle Rock Energy Partners (EROC), together with its subsidiaries, develops and produces oil and natural gas property interests. This stock closed up 3.9% to $3.44 in Thursday's trading session.

Thursday's Range: $3.33-$3.50

52-Week Range: $2.64-$6.75

Thursday's Volume: 1.32 million

Three-Month Average Volume: 668,254

From a technical perspective, EROC jumped higher here right above some near-term support at $3.20 with strong upside volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $2.64 to its recent high of $3.60. During that move, shares of EROC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EROC within range of triggering a near-term breakout trade. That trade will hit if EROC manages to take out some key near-term overhead resistance levels at $3.60 to its 50-day moving average at $3.68 and then above $3.80 to $3.92 with high volume.

Traders should now look for long-biased trades in EROC as long as it's trending above some near-term support at $3.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 668,254 shares. If that breakout triggers soon, then EROC will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to its 200-day moving average of $4.54, or even $5.

Must Read: 5 Big Stocks to Trade for Gains as QE3 Ends

Rada Electronic Industries

Rada Electronic Industries (RADA), a defense electronics contractor, is engaged in the development, manufacture and sale of defense electronics to various air forces and companies worldwide. This stock closed up 11.4% to $2.43 in Thursday's trading session.

Thursday's Range: $2.13-$2.44

52-Week Range: $1.26-$6.29

Thursday's Volume: 481,000

Three-Month Average Volume: 2.20 million

From a technical perspective, RADA exploded higher here right above some near-term support at $2.04 with lighter-than-average volume. This strong move to the upside on Thursday is now quickly pushing shares of RADA within range of triggering a big breakout trade. That trade will hit if RADA manages to take out its 50-day moving average of $2.44 and then once it clears more near-term overhead resistance at $2.65 with high volume.

Traders should now look for long-biased trades in RADA as long as it's trending above Thursday's intraday low $2.13 or above more near-term support at $2.04 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.20 million shares. If that breakout hits soon, then RADA will set up to re-test or possibly take out its next major overhead resistance levels at $3.30 to $4.

Must Read: How to Trade the Market's Most-Active Stocks

TravelCenters of America

TravelCenters of America (TA) operates and franchises travel centers primarily along the U.S. interstate highway system. This stock closed up 1.1% to $9.45 in Thursday's trading session.

Thursday's Range: $9.19-$9.45

52-Week Range: $7.18-$11.85

Thursday's Volume: 135,000

Three-Month Average Volume: 347,911

From a technical perspective, TA trended modestly higher here right above some near-term support at $8.82 and above its 200-day moving average of $8.70 with lighter-than-average volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $8.36 to its recent high of $9.62. During that move, shares of TA have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TA within range of triggering a near-term breakout trade. That trade will hit if TA manages to take out some key near-term overhead resistance levels at $9.51 to $9.62 with high volume.

Traders should now look for long-biased trades in TA as long as it's trending above $9 or above more near-term support levels at $8.82 to its 200-day at $8.70 and then once it takes out those breakout levels with volume that hits near or above 347,911 shares. If that breakout kicks off soon, then TA will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $10.22 to $10.75. Any high-volume move above $10.75 will then give TA a chance to re-fill some of its previous gap-down-day zone from late September that started at $11.69.

Must Read: 5 Hated Earnings Stocks You Should Love

Vapor

Vapor (VPCO) designs, markets and distributes electronic cigarettes, vaporizers, e-liquids and accessories primarily in the U.S. and Canada. This stock closed up 5% to $2.09 in Thursday's trading session.

Thursday's Range: $1.95-$2.18

52-Week Range: $1.02-$10.00

Thursday's Volume: 501,000

Three-Month Average Volume: 446,529

From a technical perspective, VPCO spiked sharply higher here right above its 50-day moving average of $1.74 with above-average volume. This jump to the upside on Thursday is starting to push shares of VPCO within range of triggering a big breakout trade. That trade will hit if VPCO manages to take out some key near-term overhead resistance levels at Thursday's intraday high of $2.18 to $2.50 and then above more resistance at $2.63 to $2.88 with high volume.

Traders should now look for long-biased trades in VPCO as long as it's trending above Thursday's intraday low of $1.95 or above its 50-day at $1.74 and then once it sustains a move or close above those breakout levels with volume that hits near or above 446,529 shares. If that breakout develops soon, then VPCO will set up to re-test or possibly take out its next major overhead level near $4.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Must Read: 10 Stocks Carl Icahn Loves in 2014

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.