We had to hold back on our “victory” cigars because the market wasn’t able to break and hold our targets for the indexes on Wednesday. Yes, if it were government work, yesterday’s numbers would’ve have counted, but we like real numbers and the indexes remain just under resistance. The good news was that we did make contact and it appears the bulls want more.
The Dow was finally able to break through our 12,000 target as the index reached a high of 12,020 but finished at 11,985, up 8 points. We said there could be fluff up to 12,150, initially, but there could be a room to run up to 12,300-12,350. Support is at 11,800-11,750 and then 11,500. The next 2-3 months should give us clues on if the index can hit 13,000 in 2011 or trades back to 11,000.
The S&P came within spitting distance of 1,300 after reaching a high of 1,299.74 intra-day. The index closed at 1,296 (+5 points) and could run to 1,325-1,350 on a breakout. Support is strong at 1,270 and then 1,250.
The Nasdaq worked its way back towards it 52-week highs after adding 20 points to settle at 2,739. The high of 2,766 was set on January 18 and the index touched 2,746 yesterday. We are still holding out for Nasdaq 3,000 while there is strong support at 2,650-2,700. Additional support is at 2,500.
Juniper Networks (JNPR, $37.05, up $2.23) had a solid session and has been a favorite stock of ours to trade options on lately. Shares were up 6% yesterday after the company reported earnings which beat Wall Street’s expectations. Although there was a letdown on guidance, we listened to the company’s conference call and we could see why there was buying.
The company said it earned a profit of $190 million, or $0.35 a share, versus last year’s numbers of $23 million, or $0.04 a share, for the quarter.
Excluding one-time items for litigation expenses, Juniper actually earned $0.42 a share. Revenue jumped over 25% and came in at $1.2 billion.
The suit-and-ties had expected earnings of $0.37 a share and $1.1 billion in revenue.
Going forward, Juniper forecasted a current range of $0.30-$0.33 a share on $1.06-$1.11 billion in revenue. Estimates had been set at $0.34 a share on revenue of $1.09 billion. However, during the analyst meeting last year, Juniper said their long-term plan was to drive 20% plus top line revenue growth. They reiterated that commitment yesterday and said that their current products and momentum should continue to deliver so they could be sandbagging their numbers.
Shares had rallied to a high of $38.73 earlier this month but came back to fill in some gaps after a huge run. Tech had its pullback last week but the market gave Juniper some slack and may be giving it a higher valuation than some of the other high-beta names. If the stock can challenge its recent high then we could see a run past $40. If shares struggle at resistance, Juniper could also be setting up for a nice short, otherwise.
More good stuff…
Qualcomm (QCOM, $51.86, up $0.34) was at double-nickels ($55) in extended-trading last night after reporting a super quarter. The saw its earnings surge 40% as profits came in at $1.2 billion, or $0.71 a share, for its latest quarter. This time last year, Qualcomm had struggled to earn $841, or $0.05 a share, and faced numerous headwinds.
As far as the futures; Dow futures are higher by 7 points; S&P 500 futures are off by 2 points; Nasdaq futures are flat.