After 6-straight losing sessions, the bounce the bulls have been looking for finally occurred on Thursday. Despite not-so-impressive economic news, the market looked strong throughout much of the day as the bulls pushed support but the rally seemed to fade by the closing bell as the bears didn’t want things to get too far out of hand.
The Dow was up triple-digits intraday, to 12,183 (+135) and eventually settled with a gain of 75 points to finish at 12,124. We mentioned past support at 12,200 might keep a lid on the rally which is now resistance going into today’s action. There is further upside to 12,350 if cleared but it will be imperative the bulls hold 12,000 today if there is downside action.
The S&P added 9 points to finish at 1,289 after kissing a high of 1,294. The index will need to clear 1,295 and then 1,300 to get the momentum back on the bulls’ side. If yesterday’s gains fail to hold, there is risk is down to 1,275 and then 1,250.
The Nasdaq lagged but still ended the day nearly 10 points higher and closed at 2,684. Tech traded to a peak of 2,696.69 but never really challenged the 2,700 level which is where we said the bulls need to finish at this week. If they fail to string back-to-back winning sessions, there is downside pressure to 2,650-2,625 for today and next week.
We have some earnings we are going to profile today, one this morning and one this afternoon.
After the close last night, RealD (RLD, $24.67, up $0.80) surprised Wall Street (and us) by posting a profit versus expectations for a loss.
The company said it earned $4.5 million, or $0.08 a share, compared to a loss of $20.9 million, or $0.85 a share, in the year-ago period. Revenue came in at $58.5 million, up from of $55.4 million.
Analysts were looking for RealD to post a loss of $0.15 a share for the quarter on revenue of $52 million. Shares were up over $26 after the initial results were released minutes after the closing bell but fell once the company’s conference call got underway an hour later.
After questioning some of the “softer” 3D openings, the company’s CEO spooked analysts by saying 3D is still in the “early innings” and that film debuts would be “all over the place” when asked about box-office sales.
The stock finished last night’s extended session at $22.30, down $1.77. This morning shares are trading at $21-and change in pre-market action.
We would somewhat disagree that 3D is in the early stages because it’s been in the consumers face for a few years now. We aren’t sure when the novelty wears off but we would bet a $50 that it will once the cinemas try to increase ticket prices which are already insane.
Don’t get us wrong, we love the technology, and we have loved Imax (IMAX, $33.16, down $1.86) since we recommended the stock to our readers when shares were under $3. Now that the stock is up 1,000% and has been a solid 10-bagger since we brought you the story, we would close half and set tight stops at $30 on the other half just to be safe.
The bulls are once again behind the 8-ball this morning as futures are pointing towards a slightly lower open. Dow futures are down 39 points to 12,005 while the S&P futures are lower by 5 points to 1,277. Nasdaq futures are off by 6 points to 2,243.
We may be taking profits on one of our trades this morning which could DOUBLE once we open. Subscribers, check the Members Area for the trade updates.