Facebook (FB) is the star of the show with its great earnings report but what is most notable today is that there are more pockets of strong momentum. The big cap earnings reports and the dovish Fed have changed sentiment and that is enticing the momentum players that are looking for breakout plays.
It is the action in secondary stocks that is giving the action a much better feel. While Facebook and ServiceNow (NOW) are charging ahead, traders are looking for the stocks that may see some positive sympathy. They are buying a variety of cloud plays in sympathy and looking at other things such as Twitter (TWTR) as well. I've taken a position in Zscaler (ZS) as a cloud sympathy play.
Biotechnology names are doing very well despite no real news in the sector. My top pick for 2019, Aimmune Therapeutics (AIMT) is turning up nicely. I'm inclined to start building Amarin (AMRN) on reiteration today of a $35 target.
I often avoid many of the well known big cap plays because they simply don't have compelling technical setups or don't move fast enough to interest me. However, Facebook (FB) is intriguing with this technical pattern that suggests that it is going to be a 'go to' name for big cap momentum players.
What was really remarkable about Facebook is that it produced 30% revenue growth on a huge base and growth accelerated on a sequential basis. EPS growth is predicted to be around flat in 2019 but with that revenue growth the current multiple of 20 is not expensive.
There are plenty of reasons to complain about some of the policies of Facebook, especially when it comes to privacy, but they are putting up some impressive numbers and many funds will feel they have to own it.