NQ Mobile Stock Consolidates on MACD Divergence


NQ Mobile Security is a mobile security product which shields users’ mobile data from malicious attacks. The company protects against hacking, phishing, and privacy intrusion. It offers a cellular malware scan, Internet firewall, and call/SMS blocking. NQ Mobile subsidiary FL Mobile is the top iOS mobile game publisher in China. FL Mobile has published these hits: “Gods and Dragons,” “QQYujian-FL Extreme Edition,” “City of Splendors,” “Little Ninja,” “War Fire 1942,” “Gold Lost City,” and “Little Dragon.”

On October 27, 2014, NQ Mobile filed SEC Form 20-F,l. This filing showed full compliance and no attempts to delete documents. NQ Mobile retained the global law firm of Shearman & Sterling to conduct the independent review. Shearman & Sterling engaged Deloitte & Touche as forensic accountants to assist. NQ Mobile stock soared 20% after the SEC filing laid to rest the idea that illegal accounting took place. (Source: NQ Mobile Inc. Files Form 20-F)

On October 28, 2014, NQ Mobile rejected Bison Capital’s offer to take it private. The Board said, “After careful consideration, the Board has decided that NQ Mobile will be best positioned to maximize value to its shareholders as a public company”. (Source: NQ Mobile’s Board Formally Rejects the Bison Capital Offer)

On November 4, 2014, NQ Mobile announced that gaming subsidiary FL Mobile™ had been selected by Rovio to be the exclusive publisher of “Angry Birds Seasons” for Android devices in China. (Source: Rovio Selects NQ Mobile as Publisher of Angry Birds Seasons for Android Devices in China)

NQ Mobile (NQ) has withstood a strenuous audit of its books. Bison Capital confirmed the value of NQ Mobile stock when it made an offer to take the company private. Finally, Rovio created a great new revenue stream for NQ when it chose it to be the exclusive publisher of Angry Birds in China.

NQ Mobile Stock Fundamentals

The Price to Sales of 3.3 suggests NQ is undervalued relative to the amount of sales it’s doing. The Price to Book of 1.36 suggests NQ is attractively priced relative to its assets. The revenue growth at NQ Mobile since 2009 has been breathtaking. The company has grown from $5.3 million in sales in 2009, to more than $196 million in 2013.

NQ Mobile Stock Seasonality

NQ Mobile stock typically moves higher in January and February. These are the two strongest months of the year for NQ. In January and February, NQ has closed higher than where it opened 100% of the time! In January, the average move is +15%. In February, it is +7%.

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NQ Mobile Stock Seasonality

December is the time to position ahead of the seasonally strong months of January and February.

NQ Mobile Stock Chart

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A positive divergence has formed between NQ and the MACD. NQ Mobile stock seems ready to pop like it did back in late October.

Disclosure: I do not hold any position in any stock mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Energy ETF Under Attack After OPEC Meeting


On Thursday, after Saudi Arabia put the kibosh on decreasing oil production, short sellers moved in to target the energy sector.

In full-on assault against U.S. shale drillers, the Business Insider reports that Saudi Arabia’s oil minister Ali al-Naimi told fellow OPEC members they must combat the U.S. shale oil boom, arguing against cutting crude output in order to depress prices and undermine the profitability of North American producers.

Saudi Arabia basically strong-armed OPEC into not cutting production in the name of market share. OPEC is desperately trying to hold on to its global share of oil sales.

Ultimately, Saudi Arabia’s plan will fail because the bigger U.S. shale drillers are not going to idly sit by and watch their profits fall. Instead, a need will arise to lower the cost of shale drilling even further. A need for greater efficiencies and lower costs will cause shale drillers to increase their R&D expenses.

The Energy Select Sector SPDR ETF (XLE) came under intense selling on Friday, November 28, 2014, as the market positions for a continued downtrend in the price of oil.

Energy ETF Chart

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The energy ETF XLE did a breakaway gap down on Friday, November 28, 2014, as short sellers moved in to the energy sector. On October 20, 2014, XLE did a Burial Cross where the 50 day moving average crossed below the 200 day moving average. The MACD gave a sell signal on Friday as it broke below the signal line.

Where is XLE likely to fall to? Looking at a monthly chart of the energy ETF XLE going all the way back to March of 2009 when it first began its uptrend, and doing a Fibonacci retracement overlay, will give us a price target (click on the chart below to enlarge):

Notice the histogram bar on the MACD on the monthly chart is at -1.23. This is the lowest reading since late 2008 and early 2009. The monthly time frame trumps the weekly, and the weekly trumps the daily. Folks, this is a major sell signal. The 61.8% Fibonacci retracement level is at around $61 and that’s where I suspect will be the next major support level to be tested over the coming weeks and months.

Energy ETF Warns Against Playing Energy Small Caps

Wonder why Fox News is not expressing outrage over OPEC attack against U.S. shale drillers? As traders who get our information from mainstream media sources like Fox News, we have to be mindful of business relationships. Source: https://www.facebook.com/photo.php?fbid=696980206990514
Folks, I can’t stress enough the warning that the chart of the energy ETF XLE is sending: stay out of energy stocks. Skilled professional traders are shorting energy stocks right now. Always remember that stock trading, at its essence, is you trying to take the money of some other trader, while they are trying to take your money. As an amateur trader, you want to swim in the pond with other amateur fish so your chances of being a top predator in that pond are better. You don’t want to swim in the pond with bigger predator fish (access to all stop order levels, level III trading software, HFTs) because your chances of being swallowed whole are much higher. I did a lesson about swimming in the right pond here. Furthermore, the last thing you want to do is to try and catch a falling knife in this sector. I know that it’s tempting to look at the oversold charts of small cap energy stocks but remember, the RSI and stochastic indicators can gyrate below the 30 or 20 line for many months. Worse, these same small cap energy stocks may have a large percentage of their revenue come from fracking. They could be the first U.S. shale drillers pushed into bankruptcy by OPEC.

Disclosure: I do not hold any position in any stock mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Infinera Stock Upward Earnings Estimates


Infinera Corporation (INFN) engages in the design, development, production, and sale of optical networking systems to communications service providers to be used in their fiber optic backbone networks.

Infinera stock has an incredible EPS growth of 33.3% quarter over quarter. It’s not just past earnings growth that makes INFN a compelling buy.

INFN has excellent up-trending EPS revisions during the last several weeks. About 60 days ago, the EPS estimate was $0.04. About 30 days ago, that was moved up to $0.05. Only 7 days ago, the EPS estimate was increased to $0.11 per share. That is an almost 200% increase in the EPS estimate over the last 60 days. These positive earnings estimate revisions suggest that analysts are getting more confident about INFN for the coming quarter and year.

Infinera stock appears to be currently undervalued in relation to the amount of sales the business is doing. The business’s market value seems attractively priced in regard to the assets it has with a Price to Book ratio of 3.69.

Total cash is $317.5 million. Total debt is $114.8 million. The company has enough cash to cover its current liabilities and its fixed expenses for the next 12 months.

Infinera Stock Chart

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The RSI at 35 suggests INFN is at a good entry level. The histogram bars on the MACD confirm the excellent entry level and appear to have flattened out.

For the trailing three months, its gross margin has edged up by no more than 2-6%, yet it stands a good chance of unleashing a positive trend for the upcoming quarters.

Disclosure: I do not hold any position in any stock mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.