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1. Nokia Powers Higher
4/16/2009 1:48 PM EDT
Volume is running very heavy in
today. The stock is up 10% following today's first-quarter earnings report. Nokia began the day with a powerful gap-higher open that lifted the stock to its best level since early January.
The stock has come off a bit since the open but has maintained the bulk of the gains with the help of heavy upside volume. This surge in trade, the heaviest in eight weeks, has pushed Nokia above heavy resistance near the $14 area.
Considering the stock is now over 20% above its March close, a healthy pullback is likely in the next week or so. Strong support is now in place between $13.50 and $14. A re-test of this area would provide a low-risk buying opportunity before the rally can continue.
On the upside, I expect Nokia to test its January/December highs just above $16 in the next few weeks. The stock will encounter some heavy supply in that area. Just above is the 200-day moving average at $17 -- Nokia has not tested this in over a year.
2. Home Financing Takes a Cue From the Carmakers
4/16/2009 11:54 AM EDT
A Realtor friend just sent me this bit of news regarding Clayton Homes (owned by
. The homebuilder just announced a payment protection program that will cover homeowners' mortgage, insurance and property taxes for three months on new homes purchased between March 1 and June 30 if the owner becomes unemployed after the purchase.
The more I see programs like this, the more bearish I become on real estate as an investment class. The prospects for stocks are looking much better at this point.
3. Glaxo: Waving the White Flag in HIV
4/16/2009 9:34 AM EDT
Today's announcement that
are merging their respective HIV drug businesses is a sign that Glaxo (and perhaps Pfizer as well) is no longer able to compete in the market against
Glaxo is the Norma Desmond of the HIV world, while Pfizer's marketing efforts can't stand up without training wheels. If either company were serious about the commercial market for HIV, they'd be partnering and/or acquiring more promising and competitive HIV drugs.
Instead, a newco in HIV that combines drugs from Glaxo and Pfizer doesn't do anything to alter the competitive landscape, nor does it threaten Gilead's dominant position. In fact, this deal signals an acknowledgement by Glaxo that recent market-share losses to Gilead are accelerating.
Long GILD in the Biotech Select model portfolio
4. Mickey D's: Holding Up While Burger King Sputters
4/16/2009 7:37 AM EDT
fell less than 2% yesterday on a day when
fell more than 15%. BKH announced that total sales were roughly flat in the quarter (with comps negative), due in part to a big traffic slowdown in March. Shares of McDonald have outperformed Burger King by about 15% over the last year (prior to yesterday's sharp sell-off in BKC).
You have to wonder if Mickey D's will also note weakening traffic trends. McDonald's reports next Wednesday, April 22. Shares of McDonald's trade near the midpoint of the 52-week range while BKC now trades close to the bottom. To the extent that this is just a pure market-share story, that is justifiable. But if both companies are equally exposed to demographics and the economy, then a paired trade is in order, as BKC is far cheaper by a whole range of metrics.
5. The Blackstone Group: Positioned to Benefit
4/16/2009 7:00 AM EDT
is sitting in a strong position. The company has plenty of cash, a strong balance sheet and lots of savvy pros. As we come into the bottom of the economic cycle, Blackstone will be able to take advantage of the opportunities for attractive investments.
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This article was written by a staff member of RealMoney.com.