Apple is expected to sell 10 million iPhone units in 2008 and already has a 19 percent market share in the smart phone arena. A new model of the iPhone sometime this fall and the release of G3 technology will undoubtedly push the iPhone over that marker. Since Apple is not the type of company to give estimates it cannot beat, the real numbers should only be higher. I’m confident the upcoming holiday season should drive sales 1.5 to 2 times the amount of other quarters. Also, look forward to WWDC where Steve Jobs will most likely unveil iPhone 2.0 with .Mac syncing.

Now on to technical analysis. Apple is very attractive even after its recent 3 month (30%) run up. In fact, I feel that Apple is forming a beautiful cup and handle formation that will see another 20-30 point run up in the next 2 months. Also, the stock has formed a golden cross in May and it seems that the consolidation period is over. Finally, the stock has been trading over its 50DMA and 200DMA.

Costco: Value in a shaky economy
Costco reports earnings on Thursday and predicts a profit of 65 cents with revenues of 16.33 billion for the quarter. The company continues to increase sales despite a tough economy because consumers are looking to buy in bulk to reduce costs. In store sales were up 8 percent in April, beating estimates of 6.1 percent. Recently, Dollar Tree Inc and Ralph Lauren have reported higher than expected earnings. Also, BJ’s wholesale, the third largest big-box seller behind Costco, saw solid earnings and raised guidance. Costco’s short-term looks favorable with the increased buying but its current price of 73 looks fairly high and the upcoming earnings may already be priced in. Inflation may also be hurting the profits. I have two recommendations. Shop at Costco to save a few bucks but wait for a pullback after earnings just like BJ’s to the 50dma and then look to get in.

Petroleo Brasileiro has seen its shares triple in the past year and all indications point to full steam ahead for this 300 billion dollar giant. There are a number of reasons why PBR continues to see its value increase.

1. They consistently find large amounts of recoverable oil in new fields. This includes, the Tupi field, which had 8 billion barrels, the Jupiter field and theCarioca location which could have 32 billion barrels. This would make it the 3^rd biggest field in the world. All these findings have the company seeing 100,000 barrels per day by the end of 2010.

2. PBR has the resources to fund its expeditions and exploring activities. The company is willing to take on debt to buy more rigs and is cutting back on some r&d to focus on developing the above fields.

3. Lastly, the rise in oil prices means more profits for the company and higher margins. This is due to costs in exploration and SG&A being relatively stable while gas pushes 140 in the USA.

Technically, this stock looks solid too.

Trina Solar reports on Monday at the tail end of many Solar company earnings. Trina is expected to have gross margins of 24% which is a number they should be able to surpass since they did 27% last quarter. Recently, Trina has made deals with Silfab and DTK to diversify its polysilicon supplier base and have a safeguard against shortages. I think this is a big hit or miss situation for Trina because of the recent rise in Solar stocks and would could be the grand finale or grand drop of solar. If Trina reports higher than expected earnings and maintains guidance, look for this stock to shoot past the lower 50’s and break a 5 month old resistance point. If not, we will have to see if the stock can withstand support at the 200 day moving average of roughly 43. Either way, I think this is a good short-term play on solar, and maybe one of the last for the next couple of weeks. Check out the chart

Syntroleum Corporation (Nasdaq: SYNM) offers the Fischer-Tropsch technology that allows converting biomass, coal, natural gas, and other carbon-based feedstocks into synthetic diesel and jet fuel. The company also targets the renewable energy market with their other technology called Bio-Synfining. The latter technology will be used for the production of renewable synthetic fuels from fats, oils and greases.

In their latest SEC filing Syntroleum reported a net loss of $2.2 million which was mostly due SG&A and engineering expenses. This however didn’t have much effect on the company’s share price as the stock keeps rallying up. Syntroleum’s stock has been on an uptrend since the end of March, 2008. There are currently no technical indications of trend reversal.

The company is in a stable financial position having nearly $24 million in cash. Capital was raised through equity and debt financing, and from the sale of certain assets. The company’s expenditures should decline somewhat, as Syntroleum has implemented a program of overhead expense reduction. The company has also completed their research and development activities and claims to be concentrating on the commercial deployment of its technology.

The company has enough cash to support current operating activities and thus negate a loss from operations for at least another year. Our concern is whether the company will be able to raise the estimated $158.5 million needed for the construction of a plant which would allow using the Bio-Synfining technology. The company has stated that it is actively seeking financing alternatives, including joint ventures and strategic alliances.
If the company fails to raise the funds needed they will be forced to consider either a business combination or a sale of assets. It is clear the company cannot go on for long with continuing losses from operations. If their plans for plant construction fail, we will probably see the company’s stock hitting the bottom. Meanwhile investors can enjoy a continuing rally up in this rather risky stock.

The government is encouraging companies to research on alternative fuels and backing companies up financially. Also, the U.S. military, the worlds largest consumer of oil has signed an agreement with Syntroleum to build a synthetic oil refinery for supply. As long as oil prices keep going up, the interest in synthetic fuel will only keep rising with it. However, I’ve not initiated a position in SYNM and am waiting for a clear resistance point to open up a small position in this risky stock. Below is a chart on Synthroleum’s recent price movement.