Courtesy of Blain.
We said last week a few times it is a difficult time to be short the market even if the indexes are not doing much because at first hint of a Greek agreement the market should bounce. And with the deadline fast approaching and the usual “kick the can approach” (i.e. fix nothing long term but extend deadlines etc) that has been in place for years bears betting against more can kicking risk their market future. There was not even a Greek settlement today but just some vague hopes for one and that alone pushed up U.S. markets – and had certain European markets up 3%. The S&P 500 gained 0.61% and the NASDAQ 0.72%; almost all these gains came premarket. Of course if some bad news comes out in the next few days all this can be reversed short term!
Eurogroup President Jeroen Dijsselbloem said Greece’s new proposals are a “welcome step” but not enough to solidify a deal today. Over the weekend, Greece’s Prime Minister Alexis Tsipras showed new willingness to make concessions that would unlock aid needed to avoid a default. The cash-strapped country faces a 1.5 billion euro ($1.7 billion) payment to the International Monetary Fund (IMF) at the end of the month. If no deal is reached, many speculate Athens will need to impose capital controls to avoid a banking crisis as savers withdraw their bank deposits.
The S&P 500 is still fighting with the top end of a months long range, while the NASDAQ appears to be in the early stages of a breakout; even if Friday’s action was not the most friendly. That’s the situation when you are dealing with a news driven market – especially one that is reacting to European news.
The Russell 2000 actually might have already broken out and been the first of the indexes to go.
Today’s action is also an illustration on why it was too late to try to short the German market. Greece and Germany are joined at the hip.
Facebook (FB) was a winner today as its price target was raised to $120 from $92 at Piper Jaffray. Facebook’s video advertising platform is gaining ground on Google’s (GOOG) YouTube, according to Reuters.
Biotech was up big today – what else is new?
Short selling firm Citron put out a negative report on Ambarella (AMBA) [talk about a parabolic chart!] …which also hit GoPro (GPRO) as Ambarella provides chips to GoPro.
In its report, Citron called Ambarella’s stock appreciation “ridiculous.” It set a 12-month price target of 60 and an 18-month target of 40. In its report, Citron called Ambarella’s stock appreciation “ridiculous.” It set a 12-month price target of 60 and an 18-month target of 40. Citron said Ambarella’s stock price had separated from reality.
Citron last year famously called a bubble on 3-D printing company stocks including 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS). “It seems like yesterday that Wall Street was frothing at the mouth over 3D printing stocks,” Citron said in a blog post . “These highflyers were not valued based on their financials but rather as a beneficiary of being anointed as ‘the new new.’ Citron Research was critical of the space and published pieces on 3 of these bubble-levitated 3D printing stocks. It is 18 months later and most of them languish 80% off their highs.” Citron said Wall Street had anointed Ambarella as another “new new” in tech stocks. Outside of security camera applications, Ambarella is serving niche markets, Citron said. Plus, it is facing increasing competition from low-cost competitors in the action camera space.
Fitbit (FIT) continued its post IPO run – once retail investors get their hands on this type of IPO you just never know when it can go – we highlighted this one twice last week.
