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Amazon’s Irony: Stock Shows Bullish And Bearish Traits At Same Time

Loading the player… Amazon ( AMZN ) is currently trading about 18% off of its high, reached at the end of last year; a weak Q4 earnings report in late January dragged it down. And now reports say that a rival, Alphabet ( GOOGL )-owned Google, is winning some big cloud service clients, including Disney ( DIS ), Home Depot ( HD ), Apple ( AAPL ) and Spotify. The Google platform competes against the e-commerce giant’s Amazon Web Services cloud service. Amazon shares are finding support at a key area today, but the technicals are also flashing a potentially bearish sign. The stock rose 1.6% in light trade Wednesday, finding support at its 50-day and 200-day lines as it works on a consolidation pattern. But those lines could soon cross, an action that’s bearish and signals short-term underperformance. Meanwhile, Alphabet is working on a cup base with an 810.45 buy point. Alphabet shares are currently trading 6% below that pivot point and fell 0.3% Wednesday. And speaking of widely held tech stocks, Facebook ( FB ) is working on a cup base with a 118.69 buy point. The stock is trading 4% below its buy zone. Facebook shares edged up 0.3% Wednesday. Microsoft ( MSFT ) is shaping a consolidation base with a 56.85 buy point and is trading 5% below the pivot. Microsoft shares dipped 0.2% Wednesday. And Apple has been in a consolidation pattern since last April. It’s trading 21% below its high, reached about 11 months ago. Apple shares lost 0.6%.

Gaming And Messaging Drive Up Tencent Q4 Revenue And Stock

Tencent Holdings showed the growing maturity of China’s love for all things Internet with a fourth-quarter earnings report containing strong growth in online games and social networking revenue. Tencent ( TCEHY ) said revenue surged 45% in local currency to $4.7 billion, beating the consensus estimate of $4.3 billion. Tencent shares, which trade over the counter in the U.S., rose 4% to 20.36 Thursday. The company’s primary stock listing is in Hong Kong, where it is the heaviest-weighted component of the 50-issue benchmark Hang Seng index, accounting for more than 10% of the index. Profit fell slightly short in Q4 as Tencent continues to aggressively invest in video content and mobile operations. Tencent reported earnings per share minus items of 12 cents, up 21% from a year earlier, though the result was a penny short of the consensus estimates as polled by Thomson Reuters. The company reported a net profit of $1.1 billion, up from $905 million a year earlier. “The overall results were pretty strong, with mobile gaming really exceeding expectations,” said Henry Guo, an analyst at ITG Investment Research. “One concern is the money Tencent is spending to acquire video content, but management believes they have the scale to mitigate the bottom-line pressure of content costs.” In 2015, Tencent made heavy investments to expand its library of exclusive premium videos. Tencent has an exclusive partnership with the National Basketball Association to broadcast NBA games in China. Tencent also has an agreement with Walt Disney ( DIS ) to be the exclusive online distributor of the first six “Star Wars” movies. The expanding video catalog led to a six-fold increase in video subscriptions year over year, as mobile daily video views nearly doubled over that time, the company said. Tencent is among China’s Internet leaders, along with e-commerce king Alibaba ( BABA ) and search leader Baidu ( BIDU ). Other China Internet leaders include e-commerce company JD.com ( JD ) and NetEase ( NTES ), which is the second-largest gaming company in China by revenue, after Tencent. Despite a slowing China economy, its Internet leaders have continued to show healthy growth. On Feb. 24 NetEase reported Q4 earnings that beat estimates. JD.com reported Q4 earnings on March 1 that showed strong revenue growth and a smaller-than-expected loss. JD is the largest online direct-sales company in China. A year ago, JD formed a strategic partnership with Tencent. Alibaba also beat estimates when it posted Q4 earnings on Jan. 28. Alibaba provides e-commerce platforms used by businesses and individuals to sell goods and services. Its sprawling business includes cloud computing and mobile payment services. Chinese online travel agency Ctrip ( CTRP ) had a different story. It reported Q4 revenue Wednesday that jumped 50% in local currency and beat views, but the company’s Q1 revenue guidance widely missed expectations. At Tencent, revenue from online games, its largest revenue source, rose 33% to $2.46 billion in Q4, primarily driven by growth from smartphone games through its WeChat and QQ mobile platforms. Monthly active users for its QQ messaging platform for mobile increased 5% year over year to 853 million. Monthly active users on its WeChat mobile messaging service rose 39% to 697 million. Both products serve as a strong distribution platform for Tencent games and digital content offerings. They also send massive volumes of traffic to Tencent’s social networking service, enabling a boost in online advertising. Online advertising revenue rose 118% year over year to $880 million. “Our connection strategy has really extended WeChat and mobile QQ from being social communication tools to becoming platforms for games, publishing, social advertising, premium content distribution and provisioning of other online services,” said Tencent President Chi Ping Lau in the conference call with analysts. Revenue from its social network and messaging services rose 37% to $1.1 billion. The increase was mainly driven by growth in subscription revenue, as well as higher revenue from virtual item sales.

Moonves Roadmap Lights A Fire Under CBS Stock, Selling Radio

At media firm CBS ( CBS ), it’s out with the old and in with the new. CBS stock has been on a roll since CEO Les Moonves moved up the ladder to chairman on Feb. 3; the stock touched an eight-month high Wednesday. At CBS’ investor day in New York on Tuesday, Moonves served notice that the media firm may be doing things differently and may sell off assets while at the same time eyeing acquisitions. What’s out? Moonves surprised analysts by disclosing that the media firm will put CBS Radio on the block. What’s new? CBS expects to generate some $800 million in revenue from stand-alone Internet video streaming services by 2020. With gains on Wednesday, CBS stock has climbed 16% in 2016. It’s up 13% since Moonves took over as chairman from Sumner Redstone on Feb. 3 and 27% since the media firm reported earnings on Feb. 11. Shares in CBS were up nearly 3.7% to 54.54 in early afternoon trading in the stock market today . On the TV side of the business, Moonves made clear that CBS plans to invest in content. CBS has 17 pilots in the pipeline this year and owns at least half of 16 of the shows. CBS plans to offer more shows exclusively on its streaming “All Access”  website.  CBS also offers an online-only Showtime product. “The key theme of the day was the focus on increased content ownership given more OTT (over-the-top) options globally,” said Stifel analyst Benjamin Mogil in a research report. Asked about rumors that CBS is interested in cable network Starz , Moonves said, “We look at everything.” Here’s a sampling of analyst reaction to the CBS investor day, its first since 2011: “The long-term roadmap for CBS’s fundamentals gained a lot more clarity yesterday and supported our thesis that CBS is the best mix shift opportunity in media,” said Daniel Salmon, analyst at BMO Capital Markets. CBS says that it expects $2.5 billion in “retransmission” programming fees in 2020, up from its earlier outlook of $2 billion. Piper Jaffray analyst Stan Meyers wrote: “Management believes by 2020 advertising revenues will represent less 40% of revenues as new initiatives take hold, down from 50% today and 65% a few years ago.” Andy Hargreaves, analyst at Pacific Crest Securities, has a neutral rating on CBS stock. “The overarching theme of the analyst day was a deeper push into production and ownership of content. While this is a quality business, we believe distribution will dominate economics as supply of content increases in an Internet world.” IBD’s Media-Diversified group ranks just No. 101 out of 197 industry groups. Aside from CBS, companies in that group with high IBD Composite Ratings include Scripps Network Interactive ( SNI ) and Walt Disney ( DIS ).