After delivering a solid set of earnings for its second quarter, Home Depot could’nt muster a share price rally. Higher sales comps along with higher guidance for 2016 earnings didn’t result in the stock going higher. I feel this stock has much more risk to the downside. Anything from higher interest rates to a slow down in the housing market would bring this stock lower. Furthermore I still believe e-commerce will become a bigger threat in the next year or so. Home Depot up to now may have been Amazon proof but this situation will not continue indefinitely..
I think its short term oversold conditions are going to get even more oversold. The S&P500 needs to burn off elevated sentiment so Pfizer (NYSE:PFE) could get caught in the downswing. Long term fundamentals are still strong with this stock though despite poor prevnar sales in Q2. Anything under $30 a share would be a good long term buy and hold entry point.
Exxon Mobil (NYSE:XOM) recovered well after selling off initially after its poor Q2 earnings numbers. Poor refining spreads along with lower production resulted in only $1.7 billion in earnings for the quarter. However I see crude oil putting in a bottom here pretty soon. When it does, I expect Exxon to follow suit as stronger cash flow and production levels should transpire in the next few quarters
Gilead (NYSE:GILD) really broke down after its 2nd quarter earnings. This stock cant go much lower in my view despite its obvious problems in HCV. Furthermore the biotech sector continues to go from strength to strength. I cannot see Gilead stock continuing to trade down with the biotech sector going the other way. Furthermore I believe the company’s HCV sales will eventually settle down. Despite its problems, it is still the strongest player in the HCV space at present. Risk/reward definitely to the upside here.
Exxon Mobil (NYSE:XOM) Should Bottom Soon but only because crude oil is due to print an intermediate bottom any day now. Exxon has had quite a run-up over the last month and its upcoming Q2 earnings may be used as a profit taking event if the stock doesn’t hit its earnings numbers. Future earnings seem to be priced into Exxon at present. The stock is by no means cheap as it has been supported by investors looking for yield in this space
Starbucks (NYSE:SBUX) from a technical standpoint looks dangerous to me. It hasn’t been able to make higher highs since last November and its latest earnings report places more risk on the table. This stock more than most will be affected by global macro events. I would refrain from scaling into a long position right here. The stock has strong support at $54 but not very much underneath. Its elevated valuation could all of a sudden come down to size if things do not pick up in the next few quarters.