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Stock Trading: Oracle Shares Surges to New Highs

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Stock Trading: Oracle Shares Surges to New Highs

Stock markets continue to post major bull rallies but one sector that has been largely missed by investors is the technology space.  This can be seen in professional indices trading trends, which have recently shown that assets tied to the NASDAQ have underperformed those tied to the value of the S&P 500.

But we are starting to see some of these trends change, as tech stocks have been able to post better rallies in recent weeks.  One of the best examples here can be seen in Oracle Corp. (NYSE: ORCL) which is now trading at long-term highs.

Stock Price Chart: Oracle Corp. (NYSE: ORCL)

Stock prices in ORCL have surged above prior resistance levels en route to new highs above $45 per share.  “Information driven,” Oracle is one of the most prominent names in tech development and marketing of business software products, database technology software and cloud engineered systems.  Based in the USA and established in 1977, the company is a public multinational entity having more than 136,000 employees currently with head office in California’s Silicon Valley.  

Key products among others related to Oracle are storage, servers, oracle applications and oracle enterprise manager. Enterprise resource planning, supply chain management, and customer relationship management soft wares are also specialized names which are associated with Oracle. It reported annual revenue of $37.04 US billion Dollars (2016) and net income worth 8.90 US billion Dollars (2016).

Tech Manufacturing Companies

In addition to manufacturing and marketing of business software products Oracle also offers other services which comprise consultancy, training and financing which is also a unique element in relation to Oracle. Since its inception Oracle has gone through a comprehensive process of acquisition of entities both corporate and individuals.  In 1995, IRI software was acquired by it under consideration of $100 million US Dollars.  

Other notable acquisitions include:

  • PeopleSoft in 2005 $10.3 billion US Dollars
  • Seibel Systems in 2006 for $5.85 billion US Dollars
  • Hyperion Corporation in 2007 for $3.3 billion US Dollars
  • Sun Microsystems in 2010 for $7.4 billion US dollars
  • Micros Systems in 2014 for $5.3 billion US Dollars
  • NetSuite in 2016 for $9.3 billion US Dollars
  • Apiary in 2017  for which the valuation of purchase consideration is yet to be agreed

According to reports in 2015 Oracle after Microsoft was second-largest software maker revenue wise which is indeed an impressive and substantial outlook internationally. Since the beginning company has introduced multiple technological dimensions like UNIX-based Oracle applications in 1987, PL/SQL in 1988, 64 bit RDBMS in 1995.  

This was followed by its free database to qualify industry standard security evaluations in 2002, smart scans that enhance software query response in HP Oracle Database machine in 2008 and in particular initiative in the shape of Oracle 12c which can facilitate cloud services along with Oracle Database in 2015.  Conclusively, despite facing multiple challenges since the beginning, Oracle has proved itself among preferred and highly recommended global tech entities.

Dividend Stocks, FANG, Tech Stocks

Stocks Traders: What’s Next for Apple Stock?

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Stocks Traders: What’s Next for Apple Stock?

Apple, Inc. is an American technology company that is based in California, USA. It is renowned for designing, developing and distributing consumer electronics, computer software, and online services. It was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne to make and sell personal computers (PC’s).

It is known for its flagship products, which include the revolutionary iPhone, iPod, iPad and the Mac personal computer. The Mac also links the computer’s operating system to Apple’s online products and its own web browser, Safari. To this,the company hasadded features such as iTunes, iLife and iWork creativity and productivity suites. Its online services include the App store, Apple music, iCloud and the iTunes store.

Increasing Stores

Apple nearly 500 stores across 17 nations, further it has online stores in 40 countries. These are customized to cater to their location. Their store in Reagent street in London is the most profitable shop in London. Apple has nearly 50,000 employees in the U.S alone with 30,000 working at Apple stores.

It is the largest IT company in the world by revenue and it is the world’s second largest mobile phone manufacturer. It is also the largest publicly traded corporation in the world by market capitalization. It was also the first U.S corporation to be valued at over $750 billion.

Apple’s Corporate Culture

Apple is best known for its corporate culture and image in the public eye. The company’s stock trades as part of the tech-heavy NASDAQ Composite, which can be accessed when trading indices in the financial markets.

It was one of the earliest firms to embrace the individuality of its employees and propagated an informal culture. It is said the Steve Jobs used to walk barefoot in the office even after Apple became a Fortune 500 company.

This broke the perception of a traditional corporate culture. Apple also has fellowship programs to reward employees who make extraordinary technical or leadership contributions to the company. Apple has an efficient division of labor where all employees are technical experts in their field and they are not involved in functions outside their area of specialty. Apple has also turned towards green practices.

In 2008, apple became the first electronics corporation to fully eliminate PVC (polyvinyl chloride) and BFRs (brominated flame retardants) in its products. In 2007, they manufactured mercury-free LED-backlit and LCD displays and arsenic free glass. It issued a $1.5 billion-dollar climate bond to the government in 2016. It has also removed its heavy reliance on coal to alternative and renewable sources of energy. Apple stated that as of 2016, 100% of its U.S operations run on renewable energy.

Market News, S&P 500

Will S&P 500 Hit New Record Highs?

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Will S&P 500 Hit New Record Highs?

The S&P 500 is arguably the most important benchmark in the financial markets.  Over the last few months, we have seen some amazing trends that have confirmed a bullish end to 2016.  But now that a lot of the initial optimism in stock markets has fully run its course, investors will be looking for new ways of profiting on a dynamic market that has been defined by bullish sentiment and low interest rates.

For the S&P 500, this has meant new record highs at a fairly regular clip, as investors start to price in the possibility of renewed economic optimism under the administration of President Donald Trump.  When trading this type of event in the market, traders can use the SPDR S&P 500 ETF (NYSEARCA:SPY), which can be traded using the MT4 platform that is made available by easyMarkets.

Stock Market Trends

When looking to make the best investments in the S&P 500, it is essential to understand the cyclical nature of the ways that stock market trends unfold.  If, for example, we were to look at the Elliott Wave Theory, then many would suggest that the markets unfold in a series of wave structures that can be forecasted in advance.  

On the other hand, practitioners of fundamental analysis will need to look at factors like price-to-earnings ratios and industry competition in order to determine which stock investment strategy is best.  So there does not necessarily need to be a one-size-fits-all strategy when looking to gain stock investment exposure in assets that are tied to the S&P 500.  

The world-famous stock benchmark is currently trading at record highs and when we think about the fact that the Federal Reserve has left the economy at relatively low-interest rate levels there is still clear scope that we could see stock market rallies in the S&P 500 index.

S&P 500 Trading Systems

When we are looking at the potential trading systems that can be used to trade the S&P 500, it is important to consider possibilities like options and contrarian strategies that are able to take advantage of stalling momentum or even complete reversals in major benchmarks like the S&P 500.  This is not always something that is considered by traditional stock market investors, but this is an investment strategy that can be used to profit from investments in the other direction when stock markets are trading near their all-time highs.  

Stock Price Chart: GOOG

In other cases, it makes sense to look at other stock market benchmarks like the Dow Jones Industrials and the NASDAQ.  These instruments have their own characteristics when we are looking at the ways stock market investors can implement a stance on the economic outlook.  But now that we have seen some more evidence with respect to the ways the Federal Reserve will probably proceed with interest rate policy over the next two quarters, there are ways for investors to capitalize on these trends as they unfold.  

Dividend Stocks, Investing, Market News

Dividend Stocks: JNJ Looks Strong After Earnings

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Dividend Stocks: Johnson & Johnson Looks Strong After Earnings

  • Bullish run in JNJ set to continue, despite claims stock is overvalued
  • Overall, margins and earnings performance will support the stock into next year
  • Wait for small retracements to improve risk-to-reward outlook

Johnson & Johnson (NYSE:JNJ) is a company that has one of the most firmly-established presences of any name that can be located in the financial markets.  The company was founded in 1887 by Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson with its headquarters in New Brunswick, NJ.  Today, Johnson & Johnson is, ultimately, a holdings company.  Their main businesses are in health care products and its manufacture and sale of a wide range of products that are sold in almost every American household.

In the healthcare field, the company has been a forerunner in the research and development of everyday products that have become staples in defining modern daily life.  The company, through its subsidiaries, does business around the world in 120 manufacturing facilities and can be traded using the MT4 platform.

Johnson & Johnson’s Redefined Expansion

With this context in mind, it should be understood that there is still room for expansion at the company — and Johnson & Johnson has taken recent steps to define this as an emerging outlook.  Last month, the company announced its plans to buy Abbott Medical Optics for $4.325 billion in cash. In a similar move last quarter, the company acquired Vogue International for $3.3 billion in cash as a means to strengthen its position in hair care and other personal care products.  From a strategy perspective, it can be said that these efforts have come in response to recent disappointments in its quarterly earnings reports.

On July 19, the company announced Q2 results, with earnings-per-share of $1.43 and Q2 sales of $18.5 billion.  Prior to this, the analyst consensus showed expectations of earning-per-share at $1.68 and sales of $17.97 billion. On the positive side, JNJ’s Q2 worldwide sales increased by 7.9% while domestic sales grew by 8.8%. Thomson Reuters polls suggest that FY2016 sales will come in from $71.5 billion to $72.2 billion and adjusted earnings-per-share will come in from $6.63 to $6.73.

Stock Performance

Johnson & Johnson stock is currently trading near $117, toward the upper end of its 52-week trading range of $94-126, with a trailing twelve-month earnings-per-share is $5.37.  At these valuations, this gives JNJ a 21.9 PE — and this is perhaps one of the most overlooked features of the stock at current price levels. The industry average shows a PE multiple of 36.6.  So when we take these factors into consideration along with the significant buy momentum that has already been seen this year, it is much easier to see why the current bull run has not yet run its course.  At this stage, the analyst majority is expecting earnings-per-share of $6.96 for the year ending December 2016 and $7.11 for December 2017, and this supports the outlook for further gains in the market valuation.

Over the last five years, Johnson & Johnson has produced a 13.32% annualized return-on-investment, and a 20.05% annualized return-on-equity during the same period.  On the negative side, it should be noted that the company has a somewhat subdued 5-year annualized sales growth rate of 2.62% and 5-year annualized EPS growth rate of 2.76. This can be attributed largely to the broader weakness we have seen in global markets, and this is something that should continue to be rectified as long as most central banks in emerging markets maintain a dovish policy stance.  Another factor that helps to reduce these negatives is the fact that the company performs much better with its margin levels than the comparable industry average.  Its gross margin is TTM 69.61% vs industry average of 54.53% and its net profit margin is 21.20% where the industry average now rests at 11.10%.

Dividend Stock Investing

So while many analysts have dismissed the stock as being overvalued in the current market context, there are several factors that put those forecasts at risk in favor of additional runs higher.  Given the regular nature of the stock’s price performance over the last year, investors can wait for a drop back toward the 200-day moving average near $115 (highlighted in the chart above).  One factor that could change the outlook and reduce performance within the company is the fact that Johnson & Johnson is still lagging when we talk about the company’s return-on-assets. Its 5-year average annualized return-on-assets is 10.66% (compared to the industry average of 13.25%), so there are clearly managerial issues here that will need to be addressed.  Similar trends have been seen in cryptocurrency markets and this is likely to continue until investors see a Bitcoin ETF.

But, overall, investors will continue to be rewarded for their patience in the stock as the company is one of the best regular dividend payers in the market. JNJ pays its dividend quarterly, and over the last two-quarters the company paid $0.80 a share (a dividend-yielding 2.7% at current prices). This is nearly double the industry average, which is now showing yields of 1.41%, and this is why there are still many in the analyst community expecting the stock to outperform when bought on dips from current levels.

Forex, Long Ideas, S&P 500

Will The Fed Stall Stock Markets?

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Will The Fed Stall Stock Markets?

The US Federal Reserve is a regional bank that is the central banking system of the United States. Operated by the Federal Open Market Committee the bank is responsible for implementing monetary policies as well as controlling the economy of the country. The US dollar is the prevailing currency of the USA, and this can be traded using the forex trader platforms offered by easy market.

Since the financial crisis that hit the country in 2008, the Federal Reserve has held on to keeping the interest rates as low as possible for more than seven years in order to help recover the economic state of the country. As much as this move is positive, some economists claim that it is setting up competitive pressure that is increasing credit risk, weighing on bank returns and pushing money lenders to compete for more for borrowers.

Monetary Policy:  The End of QE

However, the most recent time when the US central bank raised its interest rates was back in December promising to raise the rate about four more times in the years 2016. Later on, the bank reported that it would only raise the rates twice in the year. The bank explains that it is safer to proceed moderately considering the prevailing economic risk in order to verify the strength of the labor market.

Furthermore, in a statement released after a two-day meeting in March this year, the chair of the Federal Reserve put forward that the central bank had put on hold a further increase in the interest in the US. This came as the opposite of what the majority was expecting. Most people expected that an announcement regarding an increase in interest rates.

Historic Interest Rate Levels

screenshot-2016-09-10-at-4-18-00-pm

The Federal Reserve resolved to keep the rates between 0.5% and 0.25%. For this, it claimed that though the labor market is strengthening, it still targets reaching a 2% inflation rate which will see the US economy expanding moderately. This comes after a recent decline in energy prices globally and a low inflation rate internationally.

Most economists expected the chair Janet Yellen to hint at the two interest rates hikes that were promised earlier down from the four previous ones that were revoked. Probably, the hike has been postponed following the slowdown in China or global market uncertainties and with the next meeting of the Federal Open Market Committee scheduled on June 14-15, it is expected that there may be a hike in the rates.

 

 

Forex, Options, S&P 500

Dow Jones Investors: Technical Analysis Strategies in Daytrading

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Dow Jones Investors:  Technical Analysis Strategies in Daytrading

The price-weighted average of the most 30 prominent stocks traded on the New York Stock Exchange (NYSE) and NASDAQ is known as Dow Jones. In general, the stocks with higher market caps are considered in Dow Jones trading and this is important information when we are looking for ways to capitalize on stocks in live markets.  

Dow Jones Daily Bar Chart

Capture

Figure: Dow Jones Technical analysis strategy

Trading the Dow Jones is pretty effective with RSI and 200-day moving average. Forex moving averages can be found using an effective forex trading platform like the software offered by easyMarkets.  Traders draw trend line and channel to find potential trade setup. Unlike another trading strategy Dow Jones is traded with breakout strategy. Traders draw proper channel and trend line in the daily bar chart and wait for confirmation signal in the RSI after the breakout.

Trading Channel Support

In the above figure sell signal was initiated with the breach of channel support. Traders take the confirmation from RSI value. Since a value of RSI was below 50, the sell signal was valid.

The second trade was initiated after successful completion of the triple bottom in the bar chart. Traders went long after the new higher High which was created just above the 200-day moving average. Before going long, make sure that the value of RSI is above 50.Remember that we will go long only if the price is above 200-day moving average and for short the price should be below the 200 days moving average.

Understanding Time Frames

When you are using technical analysis strategies like this, it is always important to consider the time frame you are using in your approach.  There are some differences in the ways that markets operate in the short-term and long-term perspectives, and these time frames tend to be most useful for certain types of trading styles.  If you tend to have a more conservative approach, then it is usually preferable to adopt a long-term trading strategy as this will allow you to avoid many of the short-term fluctuations in price that can be seen on a short-term day trading basis.  These are factors that should be considered before you make the decision to put live funds into the active markets.