#$dtv

DirecTv (DTV) and Solar City (SCTY) are two stocks that have been basing for a long time.  DTV traded between roughly between $83-$88 for 1 year, SCTY traded between $47.75-$57.50 for 7 months.  Both stocks are trading above their respective bases. I'm always intrigued by bases because a prolong period of contraction normally leads to a prolonged period of expansion, and the longer the base the better it is.  What happens in the base is that the buyers and sellers find equilibrium, the sellers for the most part are done selling and or the buyers are taking in all the supply.  These new stockholders obviously believe that greener pastures await the stock.  More importantly, what you see right before the stock exits its base to the upside is a series of higher lows. Which is exactly what we have seen with both stocks. DTV ($88.33) and SCTY ($60.13) are both trading just above the upper of their base, as a speculator a buy and hold of these two stocks is in order as long as they stay above their bases. Due to how close they are to the upper end of the range they both are providing a decent risk reward trade. The measure move for DTV is $93 and for SCTY $67, you get the measure move by taking the difference of the upper end of the range minus the lower end plus the upper end ($88-$83=$5+$88=$93).

Hey Buddy, how are you doing? As we sit here me writing and you reading we both have seen better days.  Lets go back to the good days for both of us 2007 you introduced the world to iPhone, and now that company is taking your place in the DOW. Its kind of like that dirty dog took Sam Cooke's baby in Tennessee Waltz he introduced him to his baby and while they were dancing his friend stole his sweet hart away from him.  Only I know how much you have lost… I use the great state of Tennessee because thats when I was introduced to you.  You open a huge office in Brentwood and have the iconic building in Downtown Nashville, I was 18 years old learning how to "play" the market and basketball, bought a few hundred shares, and Like John Muir I entered the wilderness with nothing more than my journal and a childlike sense of wonder. I at the time had a Nokia phone and then it happened the sidekick 2.  That was the first smartphone to dramatically impact what carrier you had. To get on the trend bus because my friend from the Real World told me it was the It item of the year, I dropped my ATT plan and went to Tmoblle. Then you guys had the exclusive relationship with Apple (sorry i know it stings) and I came back to what I saw it home.  But this time around I added Uverse a home phone and internet and you bent me over the coals. 

The markets opened higher this morning, responding positively to the Republican win of the Senate, and better than anticipated ADP jobs numbers. ADP nonfarm payrolls came in at 230k vs. an expectation of 229k. This bodes well for Friday’s U.S. employment for October. Currently the Estimize consensus is calling for nonfarm payrolls of 257k and unemployment to stay the same at 5.9%.

On the earnings front, after yesterday’s closing bell we received disappointing results from TripAdvisor, the last internet retailer from the S&P 500 to report this season. The company reported EPS of $0.48, well below both the Street’s consensus of $0.60 and the Estimize consensus of $0.61. Revenues of $354 slightly beat both measures. The bottom-line miss caused the stock to tank nearly 15% in after-hours trading. A lion’s share of TripAdvisor’s revenues come from click-based advertising, which represented 70% of its revenue in Q3, but CEO Steve Kaufer said this quarter there was “lower than expected Click-based revenue growth.” A bright spot during the quarter was the company’s acquisition of Viator, a service that allows users to book tours and attractions. This should compliment TripAdvisor’s travel product portfolio nicely, and help to increase traffic and user base, and thereby profits. Fellow travel site, Priceline, posted results yesterday, and to investors’ dismay provided lower-than-expected guidance for Europe, reflecting the importance of global growth to the marketplace.

Time Warner kicked off a blitz of media earnings this morning, reporting impressive EPS of $1.22, beating both the Street and Estimize consensus by more than $0.20. Revenues of $6.24B also surpassed expectations. The company saw double-digit increases in subscription revenues for both Turner and HBO, “reflecting the growing strength and appeal of their programming,” according to CEO Jeff Bewkes. CBS and News Corp are scheduled to report after the closing bell, and tomorrow we will get results from the likes of Directv, Cablevision, Scripps, and Disney. Overall, the media industry in the S&P 500 is expected to see profit growth of 6.6% and sales growth of 4.4% for the third quarter.

How Are We Doing?

Expectations for S&P 500 earnings growth for the third quarter stand at 12.1%. Revenues are anticipated to come in with 4.9% growth. All 10 sectors are anticipated to post positive YoY growth on both the earnings and revenue front.

Leaders

Earnings:

Energy (15.0%). Notable industry: Oil, Gas and Consumable Fuels (15.4%)

Health Care (14.3%). Notable industry: Biotechnology (45.1%)

Consumer Discretionary (14.2%). Notable industry: Internet Retailers (25.3%).

Revenues:

Health Care (12.1%). Notable industry: Biotech (39.0%).

Information Technology (7.4%). Notable industry: Software (15.7%)

Laggards

Earnings:

Utilities (2.9%). Notable industry: Electric Utilities (0.7%).

Telecommunication Services (2.3%): All five companies are within Diversified Telecom Services. Only Verizon posted y­o­y growth.

Revenues:

Energy (1.2%). Notable industry: Oil, Gas and Consumable Fuels (­0.5%).

Materials (2.4%). Notable industry: Paper & Forest Products (­-18.3%).

Beat/Miss/Match

Earnings: With 80% of the S&P 500 reporting thus far, 57% have beaten the Estimize consensus, 32% have missed and 11% have met. This is compared to Wall Street estimates, of which 73% of companies have beat on the bottom­-line, 20% have missed and 7% have met.

Revenue: 53% have beaten the Estimize consensus, 47% have missed, and 0% have met. For revenues, 60% of companies have beat the Wall Street estimate, while 40% have missed.

The NFL and DirecTV announced an eight-year agreement to extend and expand their media rights deal for the Sunday Ticket package.  The deal is worth an average price of $1.5 billion annually, or 50% more per year than the previous contract between the two parties.  It gives DirecTV the right to stream Sunday Ticket on mobile devices and via broadband.  With the extension, the NFL will make more than $6.5 billion per year from its TV contracts through 2022. 

Beyond traditional TV coverage, the NFL is trying to tap other media revenue streams.  The league has had conversations with Facebook about creating a partnership that enhances fan interaction, and it already has a relationship with Twitter that generates tens of millions of dollars annually.  Google and YouTube also are interested in showcasing NFL content.  Additionally, various TV networks are bidding on a new NFL TV series that looks at the history of the sport.  Commissioner Roger Goodell has set the NFL’s revenue goal at $25 billion a year by 2027, and deals like these are putting the league in a strong position to reach that milestone.

DirecTV, $DTV, is known for their Sunday Ticket promotion where you can see all NFL games every Sunday. So now that the NFL season is under way what does the stock say about the season? In a nutshell it looks ready to move.

The chart above shows a consolidation since May in a tightening range, a symmetrical triangle. the recent small pull back from a 5th touch on the triangle puts it on many trader's radar. Thursday's price action with a bullish engulfing candle, combined with rising momentum indicators, suggest that you watch the upside. And if it can break the top of the triangle this time the stock could reach 95 out of this pattern. It may be time to buy a Sunday ticket to ride this higher soon.