Discover Financial Services - DFS -Daily - Ahead of the pack -The charts are lined up to the high in 2008 and the current rally looks tired at the old high, creating the look of a double-top. Given that MA and V are well off the highs and have been lagging DFS, it looks like a trade is set up here to short DFS and go long MA and V as a package. Make the longs the same total dollars as the short.
Risk a loss of 5% on the whole position, Target a gain of 10%.
Time period: 1-month.
Catalyst: The attention that Visa is bringing to Apple will lead people to analyze this space for arbitrage opportunities.
Tim 10:25AM EST 9/9/2014 MA 75.79, DFS 63.39, V 214.81
1MA trade ideas
Master Card - Fundamental + ChartMaster Card has had a great run, and now we've got a tremendous amount of new volume post split which has added to the volatility of the stock. Combine that with "this quarter's dooms day sayers" for stocks and we have a nice story to begin building a position in this stock. This is not a bottom call, but for all of those longer term investors, its a call to start dollar cost averaging into this name.
I've highlighted a Fib series that has been stable since September 2010, so we've had a great run, with lots of points to pull back too, and so, I've also highlighted several $/share points which correspond with the stocks "fair value:" based on discounted cash flow analysis, FCF growth rates.
Also, want to highlight this great call on the down turn and counter point to the valuation here:
The counter point to the stock split has been made here:
seekingalpha.com
Mastercard MA downtrend if < 78 short term, <79-80 medium termMasterCard MA
Credit Card Processing = $87 BILLION MARKET CAP
I think Bitcoin is challenging the fundamental valuation of these "transaction processors". If we assume that bitcoin is even a small threat to this establishment, then we can also assume that there is a lot of firepower behind wanting to keep this amount of market cap in tact. Nearly $400 BILLION of wealth is tied to the right to process credit card transactions, which barely touches on the value of the information that is gleaned from credit card use and the "social network" of having so much information about all of your people in your network. The credit card processors actively sell their user names for cash, which is a former of advertising. Hence, I think we can use these stocks as a yardstick for valuing Facebook, LinkedIn, Twitter, and others. Which brings me to an important question, the $64,000 question: Which would you rather own??? Social Networks or Cash Flow Networks?
MasterCard Mkt Cap $87 Billion
Visa Mkt Cap $140 Billion
Discover Mkt Cap $27 Billion
Capital One Mkt Cap $42 Billion
American Express Mkt Cap $97 Billion
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Total $393 Billion market cap for the right to process transactions and all of the associated services (usury hidden by fees)
Tim 10:36AM Friday, March 14, 2014 (Pi Day 3.14)
Mastercard - simple ideeaLike the chart I posted earlier on 3M, theres nothing much to say here.
Look at the green lines. Previous resistance levels become support after a short rally. The same case today, we had a retest of the previous resistance, hammer and lets see what will happen today. Final target should be over the resistance level, unless we see some bearish action there. I didn't check the fib extensions cause there are only 5 minutes left till market open, there might be some symetry there. 34EMA provides excelent support.
If there's no ugly gap down, long on market open
MA - Am I crazy to short this beast. Price went above the trend-line and used it as support for a week after major trend-line breakout. Now this bullish stock is experiencing long exhaustion. Nice big red candle and price going below the trend-line.
I was short early on this stock because I wanted to anticipate the next move after breakout, so went short when saw the first red candle above the trend-line. Now the price is finally coming down.
MA Head and Shoulders/Bullish SharkMA and V have been in a monster uptrend since 2010. So shorting isn't exacting for the faint of heart. Especially after today when you see it get solid volume and close above the 10 EMA. But if risk is your thing then I would suggest this. We appear to be in a AB=CD pattern short term. Which if that plays out we will break the neckline on what appears to be a head and shoulders pattern. Intermediate term I see a bullish shark which would carry us lower to the levels projected. I will say that shorting this isn't for the faint of heart, because of the strong uptrend. But when you see strong uptrends break, they really break.