Wipro Beats On Profit But Stock Still In Downtrend

Wipro Ltd posted a better than expected second-quarter profit on Tuesday, October 17, 2017. Q2 profit rose 6 percent to 21.92 billion rupees ($337.13 million), beating analysts’ estimate of 20.80 billion rupees. Revenue from IT services rose to 131.69 billion rupees from 131.37 billion rupees, slightly above its earlier forecast.

Wipro stock continues in a downtrend which means Wall Street isn’t buying the growth story.
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Top Large Cap Growth ETF iShares Core US Growth ETF

The top large cap growth ETF to trade right now is the iShares Core S&P US Growth ETF IUSG. This ETF tracks the S&P 900 Growth Index which measures growing companies using three factors: sales rate of increase, the ratio of earnings change to price, and momentum.

Large Cap Growth ETF iShares

The top 10 holdings in IUSG as of July 10, 2017 are:

Apple Inc = Information Technology
Microsoft Corp = Information Technology
Amazon = Consumer Discretionary
Facebook Inc = Information Technology
Alphabet Inc = Information Technology
Alphabet Inc C = Information Technology
Johnson & Johnson = Health Care
Comcast Corp = Consumer Discretionary
Home Depot Inc = Consumer Discretionary
Unitedhealth Group Inc = Health Care

Large Cap Growth ETF iShares Chart

IUSG is a good long setup opportunity. The chart has both a pocket pivot and positive divergence on the Effective Volume large players indicator. Prices have been consolidating lately and the volatility has been reduced setting up a momentum squeeze.

The True Strength Index on the Large Cap Growth ETF iShares IUSG has yet to do a bullish cross so some caution is warranted. There is a resistance zone just above the current price starting at 48.55. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 48.31, a stop order could be placed below this zone.


Verizon Gets Approval For XO Communications and 5G Deployment

Verizon wants to maintain its lead on coming 5G technology by purchasing XO Communications’ fiber optic network. Fortune writes

The carrier has said it will likely go national with cable TV and Internet service offered via 5G, which can carry signals at speeds of two to five gigabits per second—20 to 50 times faster that common 4G networks.

The problem though is that Verizon will still have to build out 5G towers because 5G wireless cannot travel as far as 4G wireless. A carrier can have the fastest fiber optic network in the country, but until they build 5G towers that connect wireless customers to that fiber optic network, it’s useless for mobile smartphone users.

So why did Verizon just spend $1.8 billion of investors money on XO Communications? Verizon will use XO Communications’ nearly 26,000 miles of fiber optic cables to expand its consumer and business wired internet service offering. Verizon wants to grab market share from companies like Comcast in the home and business ISP market.

Verizon will no doubt have a significant role in the IoT industry as billions of more devices go online over the coming decade.

Verizon Stock Chart

The Twiggs Money Flow is rising nicely, but it is still below the 0 line. Nevertheless, I see the positive divergence on the money flow as a sign the bottom in Verizon stock is near. Verizon stock has sold off over the last five months giving an excellent valuation of P/E 14, and forward P/E of 12. The annual dividend yield on Verizon is a sweet 4.8%.

I see Verizon as a long-term hold on the growing IoT industry.

Disclosure: I do not hold any position in Verizon stock at the time of publishing this article.