Three Stocks: Apple, Alphabet, and Viking Holdings

Apple

It was a wild ride for Apple (AAPL) shares today as the company traded almost 6% higher after last night’s earnings report.

Shares dropped earlier in reading as investors continue to mull the longer-term outlook for Apple after the earnings report failed to impress on management’s outlook, but the newly announced share buyback and dividend increase are more than enough to maintain short-term interest in the stock.

Interestingly, even Barron’s magazine is showing a mixed outlook this afternoon as they point out that, “… while what Apple delivered wasn’t especially compelling, it was better than feared.”

The last part of that statement is the most powerful.

Sentiment toward Apple was incredibly low as investors feared a worst-case scenario from the report. With sentiment that low, it is always easier for a company like Apple to draw buyers into the market. Right now, that’s the case.

The longer term will continue to see more pressures on the stock from a technical perspective. The 50- and 200-day moving average remain bearish for now.

Two prices to keep an eye on…

A move below $180 will put the stock back below its 200-day moving average.

A move below $170 would mark the stock back under its 20-month moving average, putting Apple stock back in a long-term bear market trend.

aapl stock chart

Alphabet

Shares of Alphabet (GOOGL) have traded in a wide range today as the company’s lawyers have spent the day making their closing arguments in the Department of Justice’s antitrust case against the company.

The stock has spent the last week teetering at the $165 level as arguments neared an end, with some bullish news coming earlier in the week on comments from Dan Loeb’s letter to investors which stated his fund had “made a substantial investment in Alphabet”.

The move comes after the company’s earnings report triggered a 12% one-day rally.

Alphabet shares have now “worked off” their overbought readings after the sudden rally, meaning that the stock’s bullish trend is likely to continue carrying them back above $170 with a near-term target of $185 as GOOGL moves to new all-time highs.

googl stock chart

Viking Holdings

Fresh off their IPO, shares of Viking Holdings (VIK) are surging again today.

Shares of the cruise ship company are in high demand after their launch with the stock gaining another 9% today. Shares are now up 23% from their initial trade price. The short-term gain is less than red-hot Reddit (RDDT)’s early share price action in March, which may be a good thing.

The buzz around Reddit’s IPO helped propel the stock more than 120% in the first week.

That move, along with the “buy the rumor” essence of the IPO put Reddit in the position of being the target of immediate profit-taking. That sentiment led to the stock dropping 50% from its highs, stirring speculation that the stock was too hyped and hadn’t shown any financial rationale for the price activity.

A slower move higher out of the IPO “gate” is likely to keep Viking Holdings at a positive trajectory for longer helping to avoid an immediate “sell the news” drop like Reddit.

Another notable is Viking’s position in the cruise industry. Shares of Royal Caribbean (RCL) have been outperforming the consumer discretionary sector while Carnival Cruise Lines (CCL) have been lagging.

The performance of these two stocks draws a narrative of the cruise industry (and the economy) that lower-priced discretionary companies are beginning to suffer while those linked to higher income spending remain resilient. Viking’s product falls in that higher-end spectrum of this industry.

vik stock chart

About the Author

Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.

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