Premarket Analysis for 11/21 - Upgrades/Downgrades, Gappers, Actionable Calls

Posted By Optiondragon for myhappytrading.com

From Breifing.com

Periodicals Wrap-Up for Friday, November 21st
WALL STREET JOURNAL: The Wall Street Journal reported that as Citigroup’s (C) stock price continues to decline top executive at the bank are at an early stage of considering selling off its parts or selling the company outright. Its board will meet today to review their options…NEW YORK TIMES: While the Wall Street Journal reported that Citigroup is considering selling itself, two inside sources told the New York Times that executives are not actively seeking to sell or split the company. Meanwhile. Citigroup’s management team believes that the conglomerate has managed to reduce the size of the company and control its costs under CEO Vikram Pandit, even as investors’ doubts about Citigroup mount…BUSINESSWEEK: BusinessWeek reported that the huge sell-off in the DJIA is causing some strategists to figure that the market has already priced in a recession. While volatility is likely to continue, history suggests additional significant downside is unlikely. William Rutherford, president of Rutherford Investment Management says, stocks in the infrastructure group will benefit not only from signs of an economic upturn but also from an “infrastructure buildup” that President-elect Barack Obama is expected to pursue. Rutherford favors Caterpillar (CAT), Terex (TEX) and Manitowoc (MTW)…BLOOMBERG: Funding for biotech companies has been cut to the lowest level in ten years as a result of the global economic slowdown, Bloomberg reported. The funding reductions have curtailed the funding of new drugs and caused biotech companies to go bankrupt…

Asian Markets Wrap-Up for Friday, November 21
For the first time this week Asian stocks were up as speculation increased that governments will take more action to help slumping economies…JAPAN: The Nikkei 225 rose 207.75, or 2.7%, to 7,910.79, while the broader Topix index added 20.41, or 2.6%, to 802.69. Mitsui Fudosan jumped 11% to Y1,191. Sumitomo Realty & Development Co. was also up 11% to Y1,154. Seiko Epson Corp. increased 7.8% to Y1,323. Sumitomo Mitsui climbed 8.4% to Y305,000. Mizuho Financial Group (MFG) surged 14% to Y277,000…CHINA: The benchmark CSI 300 slipped 11.69, or 0.6%, to 1,920.73. China Vanke Co. was up 4.4% to 6.92 yuan. Poly Real Estate Group Co. rose 6.5% to 17.97.Jiangxi Copper (JIXAY) lost 2.5% to 11.11 yuan. Yunnan Copper Industry Co. fell 3.9% to 8.94 yuan. Haitong tumbled 10% to 11.98 yuan. China Cosco Holdings Co. lost 0.33 yuan, or 3.7%, to 8.66…AUSTRALIA: The S&P/ASX 200 index advanced 1.9% to 3,416.50. BHP Billiton (BHP) increased 3.8%. Commonwealth Bank of Australia increased 5.6%. Woodside Petroleum (WOPEY) retreated 5.4% to A$29. Fortescue Metals Group soared 40% to A$1.80. Newcrest Mining (NCMGY) jumped 13% to A$21.46. Babcock & Brown Infrastructure Group dropped 0.6 cent, or 18%, to 2.8 cents. Sims Group (SMS) fell 70 cents, or 5.7%, to A$11.50…AROUND ASIA: In Hong Kong, the Hang Seng index advanced 360.64, or 2.93%, to 12,659.20. Bank of East Asia (BKEAY) was up 4.9% to HK$14.58. HSBC Holdings (HBC) added 1.9% to HK$77.05. China Construction Bank Corp. gained 6.1% to HK$3.81.

U.S. equities continue to point to a higher open
Stocks continue to point to a higher open. The averages are taking their lead from the overseas markets which are trading higher. The strength is being attributed to a report that Citigroup (C) may put itself up for sale. The company has been unable to post a profit in recent quarters unlike rivals J.P. Morgan Chase (JPM) and Bank of America (BAC). The price of Citigroup shares has been pummeled and investors remain concerned about he debt that continues to swamp the bank.

Analysts Initiation Summary for Friday, November 21st
MOST NOTEWORTHY: Google (GOOG), Cadence Pharmaceuticals (CADX) and Cisco (CSCO) were today’s noteworthy initiations: Google was initiated at Merriman with Sell rating. Merriman’s checks indicate the decline in consumer and business purchasing is having a dampening effect on search engine marketing. The firm sees downside risk to consensus estimates and recommends waiting for a better entry point. The firm thinks shares could reach $200 to $240 in the near-term. Oppenheimer believes Cadence Pharmaceuticals is sufficiently capitalized to reach FDA approval of Acetavance and Omigard. Shares were initiated with an Outperform rating and $10 target. William Blair believes Cisco must evolve from selling pure infrastructure hardware to providing platforms with higher value and intelligence. The firm started shares with a Market Perform rating…OTHER INITIATIONS: Wilmington Trust (WL) and Boston Private (BPFH) were initiated with Equal Weight ratings at Morgan Stanley. EMC Corp (EMC) was assumed at ThinkPanmure with an Accumulate rating and $12 target. John Bean Technologies (JBT) was started with a Buy rating at Janney Montgomery.

Analysts Downgrade Summary for Friday, November 21st
MOST NOTEWORTHY: Autodesk (ADSK), Goodrich (GR) and VMware (VMW) were today’s noteworthy downgrades: Baird downgraded Autodesk to Neutral from Outperform and lowered its target to $20 from $31 following the company’s weak Q4 guidance. Shares were also downgraded to Underperofrm from Buy at Merrill Lynch. Friedman Billings downgraded shares of Goodrich to Market Perform from Outperform as they do not expect a turnaround in the commercial aerospace stocks in the near term. The firm lowered their target to $46 from $83. UBS cut VMware to Sell from Neutral and lowered its target to $15 from $21 following checks that indicate that consensus license growth expectations are too aggressive for Q4 and FY09…OTHER DOWNGRADES: Sunpower (SPWRA) was lowered to Underperform from Neutral at Merrill Lynch. Gen-Probe (GPRO) was downgraded at Morgan Stanley to Equal Weight from Overweight. Goldman removed Emulex (ELX) from its Conviction Buy List.

Analysts Upgrade Summary for Friday, November 21st
MOST NOTEWORTHY: Microsoft (MSFT), Gap (GPS) and Healthcare Services (HCSG) were today’s noteworthy upgrades: Oppenheimer upgraded shares of Microsoft to Outperform from Perform on valuation as they see a trading opportunity following the recent sell-off. The firm established a $22 target on shares. Citigroup upgraded Gap to Buy from Hold on its “solid” Q3 results and greater visibility. The firm lowered their target to $12 from $14. William Blair upgraded shares of Healthcare Services to Outperform from Market Perform to reflect the company’s strong financial position and stable business outlook…OTHER UPGRADES: ARM Holdings (ARMHY) was upgraded to Buy from Neutral and added to the Conviction Buy List. Hewlett-Packard (HPQ) was also added to the Conviction Buy List. Intuit (INTU) was raised to Buy from Sell at UBS. Cyberonics (CYBX) was lifted to Buy from Neutral at Piper Jaffray.

Jim Cramer’s “Mad Money”
Cramer said that the systemic risks to the market have once again put the possibility of another Great Depression back on the table. “We are not done going down,” he said. Cramer unveiled his “tough love” plan for taking the risk out of the markets and restoring confidence in the U.S. economy. He called on President-elect Barack Obama not to wait until January to take action. Here’s his eight-point plan: (1) Obama needs to announce that the federal government will not allow any more big financial institutions to fail; (2) we need to ensure the the safety of all life insurance and annuities; (3) the government must stem house price depreciation by issuing tax credits for home purchases and by reinstalling the TARP plan with changes that don’t penalize the banks for taking aid; (4) the government must insure the bonds of both Fannie Mae (FNM) and Freddie Mac (FRE); (5) government must step in to buy up and stabilize some of the collateralized debt obligations, or CDOs, to stabilize that market; (6) the government must provide financing for any auto company that files for bankruptcy and provide no relief for those that don’t; (7) a trillion-dollar infrastructure program in the U.S. is needed to rebuild the country and create thousands of new jobs; and (8) the U.S. must get China and Europe to cut interest rates to 2% to head off a worldwide slowdown. Next, Cramer welcomed Andrew Littlefair, pres/CEO of Clean Energy Fuels (CLNE), to discuss the state of natural gas as an alternative fuel in a world with $50-a-barrel oil. Littlefair said the natural gas model works long term and said oil will be heading higher again. Littlefair told Cramer that CLNE does not burn any cash for operations, and only uses its reserves for capital expenditures associated with building new fueling stations. Cramer is still a backer of Clean Energy and that when oil starts to rise again, CLNE should well positioned to prosper. SELL BLOCK: while Cramer’s a fan of high yielding, energy-oriented master limited partnerships (MLPs), he sees declines in many of them as opportunities and warned of pitfalls to watch out for. At risk MLPs as oil prices plummet are: Williams Pipeline (WMZ), Atlas Pipeline (APL) and DCP Midstream (DPM). These three, need oil around $75 a barrel to make money. With oil at $49 a barrel, he fears the companies’ dividends are at risk. Cramer cited Crosstex Energy (XTEX) as an example of what can happen when an MLP cuts its dividend. Cramer said he made a mistake recommending Atlas Energy Resources (ATN), but stands behind his other favorite energy play, Kinder Morgan (KMP). LIGHTNING ROUND: (Bullish) TEVA; AA; FLO; FDO. (Bearish) FAST; FMC; FCX; ATVI.

Fast Money position recap- Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Karabell Owns (AAPL), (C), (CSCO), (GOOG), (JPM), (UYG); Najarian Owns (AXP) Put Spread; Najarian Owns (C) Puts; Najarian Owns (CVX) Put Spread; Najarian Owns (IYR) Puts; Najarian Owns (IYR) Puts; Najarian Owns (SCHW) And Is Short (SCHW) Calls; Macke Owns (SDS), (MSFT), (WMT), (UUP); Macke Is Short (YHOO)