Tesla Easily Beats Amazon, Netflix in the Latest Momentum Race

NEW YORK (TheStreet) -- Momentum stocks had been a drag on the Nasdaq in 2014 until mid-May when the five high-profile stocks I have been tracking regained their "mojo" and began to rise again.

On June 3, I wrote, Tesla, Netflix, Apple Win Trifecta in Momentum Stock Race and the race between May 12 and June 2 had a clear winner in Netflix (NFLX), with Tesla (TSLA) in second place.

In the race since June 2, Tesla has topped Amazon (AMZN) with Netflix in third place. Google (GOOGL) and Apple (AAPL) get most of the investor hype, but since June 2, they have been the laggards.

I have crunched the numbers to help you decide if and when to invest. Here are the five profiles followed by today's 'Crunching the Numbers" tables.

Apple ($90.36) is up just 0.6% since June 2, but did set a 2014 intraday high at $95.05 on June 10. While below its 21-day simple moving average at $91.62 the stock is above its 50-day and 200-day SMAs at $86.60 and $77.90.

With Google reportedly ready to announce a set-top box, the next leg of the momentum race will have Amazon touting the Fire TV, but where's the Apple TV?

The weekly chart is positive but overbought with the five-week modified moving average at 88.02. Annual value levels are $81.33 and $71.32 with a monthly pivot at $90.23 and semiannual and weekly risky levels at $95.32 and $95.79.

Amazon.com ($327.44) is up 6% since June 2, but remains below its 200-day SMA at $346.18.

The weekly chart is positive with its five-week MMA at $321.96. My annual value level lags at $259.67 with a weekly pivot at $325.78 and monthly and annual risky levels at $331.76 and $334.95, respectively.

Google ($585.93) is up 3.8% since June 2, and traded as high as $587.30 on Wednesday, well above its 200-day SMA at $539.59.

The weekly chart is positive with its five-week MMA at $563.51. Annual value levels are $522.17 and $489.53 with a weekly pivot at $586.15 with monthly and quarterly risky levels at $615.68 and $657.12, respectively.

Netflix ($444.21) is up 5.2% since June 2, and nearly set a new all-time high trading as high as $450.82 on June 18, well above its 200-day SMA at $367.91.

The weekly chart is positive but overbought with its five-week MMA at $410.75. A chart warning is that there's a potential double-top with the Feb.25 all-time high at $457.79 and the recent high at $450.82. Semiannual and annual value levels are $359.04 and $242.14, respectively, with monthly and weekly risky levels at $463.61 and $473.04, respectively.

Tesla Motors($236.89) is up 16% since June 2, trading as high as $241.88 on Tuesday, well shy of its all-time intraday high at $265.00 on Feb.26. The in-between low was $177.22 on May 9, holding its 200-day SMA, now at $185.83.

On Monday, an analyst from Morgan Stanley called Tesla the most important auto company in the world.

The weekly chart is positive with its five-week MMA at $214.96. Quarterly and monthly value levels are $227.65 and $225.09, respectively, with no risky levels.

There was a battle between Amazon and Netflix for second place as Tesla easily won the momentum race between June 2 and June 25.

Your investment policy among these stocks depends on whether or not you are a buyer on weakness or a seller of strength. We advocate using a good-'til-cancelled limit order to buy weakness to a value level or to sell strength to a risky level.

Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's report.

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: (stocks below a moving average listed in Red are below that moving average)

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three- to five-year horizon.

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six- to 12-month horizon.

Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell

This table presents the levels at which to buy on weakness and where to sell on strength.

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication, the author held no positions in any of the stocks mentioned.

Follow @Suttmeier

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

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TheStreet Ratings team rates TESLA MOTORS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • This stock has managed to rise its share value by 117.60% over the past twelve months. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • TSLA's revenue growth trails the industry average of 21.5%. Since the same quarter one year prior, revenues rose by 10.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • TESLA MOTORS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TESLA MOTORS INC continued to lose money by earning -$0.71 versus -$3.70 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus -$0.71).
  • Net operating cash flow has declined marginally to $60.64 million or 5.36% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 542.7% when compared to the same quarter one year ago, falling from $11.25 million to -$49.80 million.
Richard Suttmeier is the chief market strategist at ValuEngine.com.

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