3/8 Stock Watchlist & Trade Plans - ARKK SQ PYPL TDOC ROKU Z OKTA TSLA NIO APPH EXPE ADP CI BWA GTS
This market is all over the place. Plenty of beat-down names and plenty of new highs. No matter what you are trading be sure to have a plan and stick to it. Emotional on the fly changes usually go against you or will turn you into a gambler not a trader. Don't look at your P&L every 5 seconds (unless maybe the plan is to scalp the trade in 5 seconds). Focus on the setup and know your risk guide and target areas. When the chart moves in either direction towards those, then look at your positions and adjust accordingly as pre-planned. Keep in mind you don't have to trade anything if not familiar with a stock or if you don't really like how its trading in the moment just before planned entry.
A few bounce ideas are listed with very similar charts. Hundreds of these setups are out there right now. Take your pick and build a plan around it. Keep in mind they don't have to bounce. Many of the high growth names that have run big the past year started from much lower, so yes, they can still go much lower than most expect, just like they ran higher than most expected. I can flip bias too if the support area breaks down for another leg lower. Just depends on what the action/flow is doing to tell me if supply or demand is greater at that time. Trading was easy last year & January. Now its time to focus if you want to stick around in this game.
Drop the 'must be right' ego and you'll find yourself joining trends no matter which way it's going to make $$$. That's trader maturity. It takes time and price-action trading practice. Buying a company purely because you like a product, sector theme, or potential growth story will turn you into an 'investor' quickly. Are you going to be a trader or investor? Know the news, trade the action. Sometimes good companies get sold, and junk companies get bought. Cycles and rotations happen. Don't stay with a loser just because you like the 'story.' Easier said than done, but if you are focusing on being a trader for income then this is where having a trade plan is absolutely crucial to your long-term success of an income stream. Yes, you can do both trading and investing, but don't change your mind mid-trade because you don't want to be 'wrong' only to find yourself sitting sideways on a stock for years as an investor. Know going into a position if it's a trade or investment. I personally use separate accounts to distinguish this.
That said, I cleaned up my short-term accounts last week to make room for new trades. Am I late to rotate, we'll see. I'll focus on the trade plan to preserve capital if I am. The wife and I are off to Vegas Wednesday though, so I don't know how much I'll actually trade. I need to get back in the habit of doing in-depth watchlists again even if only on weekends as it helps me focus on my pivots and know which strikes I'm targeting in advance. I've been lazy lately as it's been too easy up until the past 2 weeks.
Enough ranting, here's what I'm watching this week:
Futures down some as I write this so no hurry to buy anything right on open. Tickers need to confirm over/under key levels noted below. Several names below are great swing trade candidates for a few weeks with tight stops regardless. If you like what you read all I ask is you give it a share. If you make money on an idea, then pay some forward to your favorite charity after stashing some away for savings/future taxes too.
ARK Innovation ETF (ARKK): Could also go with ARKG or ARKW etc, whatever your fancy. Looking at 3/19 $125 calls if it breaks out of the downtrend for a bigger bounce over 120. Target towards 135-140 range. 115 risk (not 105) guide to start or to flip to puts for a fall back towards 105. ARK ETF names can be used for a momentum/growth sentiment index too without trading them.
Square (SQ): Watching for 220 reclaim to trade those 3/19 $230 calls. Not sure if it will bounce all the way to 260 by then, so if I get a quick double out of it Monday or Tuesday; I'll roll the profit into April 260s with the goal of selling before expiration if it gets close to the target by month-end. 210 risk guide and/or to flip to puts for another flush below 200. If it doesn't reclaim 220 I may look at 200 puts instead. Square recently bought $170 million more of Bitcoin & is acquiring TIDAL from Jay-Z.
Paypal (PYPL): Looking for a 245 reclaim to snag some 3/19 $250 calls. Target towards 270-275. If it quickly doubles though I may rotate further out to give it space to work back up. Paypal is reportedly buying digital-asset/crypto tech provider, Curv. Again, knowing that is not a reason to hold if the trade goes against me. Bail and save money for new trades. 240ish risk guide if it starts to bounce to plan.
Teleadoc Health (TDOC): Oscar Health's IPO (insurance biz) flop last week is not helping non-profitable healthcare names. As people get back out there investors seem fearful growth in the digital health care sector will slow compared to last year. We'll see. Either way, I'm looking for a short-term bounce if it can reclaim 195/200 areas using 3/19 $210 calls to start. 230ish target using 190 as risk guide/flip point. If you want a healthcare name starting to breakout that also recently invested in its own virtual care platform, rather than a riskier bounce play, keep reading.
Roku (ROKU): If it continues to hold over 350 I'll be looking at 6/18 $450 calls for a bounce towards 400-425 way before that to take gains. 350ish will be the risk guide it it gets going or a build below to take 6/18 $260 puts for another leg lower with further downside confidence if it loses 325. Big upgrade by KeyBanc last week with $518 target price before falling 75 points. Let's see if buyers can come back this week.
Zillow (Z or ZG): Looking at 3/19 $150 calls for a quick bounce play. Risk guide 130 to stop out or flip to puts for another leg down below 120. Zillow recently added making cash offers on Zestimates.
Okta Inc (OKTA): Beat down after the AuthO acquisition news. Could have gone the other way and seems like a buying opp in my opinion. Maybe more so, they're worried about dilution, however, the next day a Canaccord analyst threw a $300 target on it. That's what I'm looking at if it starts to bounce from here. 1/21/22 $300 calls. I won't hold that long, but it gives it time to work and won't decay as fast even with this recent volatility. 250-270 bounce target, 195 risk guide area. Not interested puts here.
Tesla (TSLA): Same chart as others above. Quick move down ready to bounce? Might need to consolidate some now, but it could still offer us some 50-75 point range days. Looking more for day-trade income at this point. Very liquid option flow. If it can build over 600 I'll look for a day-trade setup using weekly 650 calls and be out by close either way using 600 as same risk guide. Or if it fails I can use 550 puts for another leg lower. I'll join what it gives me. Cybertruck updated look coming soon. Bitcoin pullback base b/o over 52k could help too as Elon bought 5 bucks worth or something.
NIO Inc (NIO): Unlike TSLA I'm willing to swing this one if a reversal breakout over 40 can stick. Same 40 risk guide if I get into it above the level. Looking at 8/20 $55 calls with no plan to hold that long if it bounces towards my target range 50-55 I'll take gains and re-evaluate option IV/premium at that time.
App Harvest (APPH): 30 to 15 in 3 days. Bounce idea using 15 as risk guide. Looking at 4/16 $20 calls.
Now back to my regularly scheduled textbook new high breakout setups.
Expedia (EXPE): A travel re-opening stock that is trying to breakout for the next leg up over 165. Target towards 175-185 range near-term, using the 165ish area as risk guide if it doesn't get going. Will use 4/16 $175 calls if I get into it. An interesting bull case was posted last week. Won't hold just because of some random Barron's article though. Needs to show 165 is going to be new support.
Automatic Data Processing (ADP): Watching for a breakout over 180 to trade 4/16 $185 calls.
Cigna (CI): I said above keep reading, here it is. Cigna textbook breakout set up to run in the coming weeks. Check this weekly chart. 225 is risk guide with a target of 250-260 range short term and 300 mid/long term. I will try to join the 5/21 $260 call buyer that hit Friday. Cigna recently bought MDlive to complete with TDOC etc.
BorgWarner (BWA): Looking to accumulate $50-$60 far-out expiration calls on dips using 46ish as risk guide. Long-term breakout over that level recently. Forward P/E of 10 could make this a $90-100 stock next year if earnings predictions come to be and its price resets towards the current P/E level around 20. Here is the weekly chart. BorgWarner bought a Lithium-Ion battery manufacturer last month in a step to join the EV party.
Oil names continue to stay hot as the last hoorah is coming down the pipe for oil names with some major car manufacturers announcing to go all-electric in 10-15 years time. The sector is heavy on my breakout scan lately along with financials. Top ideas here: MRO (12 risk guide) WTI (on dips, 3.50 risk guide) RIG (3.75 risk guide) HAL (22 risk guide) KMI (needs 16 b/o) PBA (needs 29 b/o)
Something weird going on with HKIB to make note of. China low floaters can run hard if the right group is behind the scene. Not in a hurry, but on watchlist in case volume sticks around and it can clear 8.
Some other alerts set for potential short-term breakouts/reversals:
FLGT 116, CCIV 27, HRB 20, FCEL 15, BNGO 8, SNAP 60, DKNG 62.50, SNOW 280, W 305, RKT 28, IQ 27, BA 230, NVAX 178, GME 150, BHC 33, GOOG 2120, SHOP 1320, WYNN 137, PENN 129, CHWY 88, CRWD 195, FDX 265, V 220, SBUX 107
The buried GEM?
Triple-S Management (GTS): If you like Clover Health's (CLOV) valuation you should love GTS because they actually make money in the Medicare game with a P/E of only 12. No one cares about Puerto Rico though, right? Well, maybe Blue Cross Blue Shield, as GTS has exclusive right to use the brand down there. Corporate presentation on Wednesday. The last time this stock brokeout over 25ish it ran towards 40 in 2018. Chart is primed to do it again in my opinion. I'm looking to trade shares on this one, using 25 as risk guide. Might throw a bid on some July or October 30 calls too. You'll see it if I do, there is zero OI right now. Someone has to start it.
For your entertainment, and my own research and planning purposes. Make your own trade plans! None of the above should be considered investment advice. Speak to an investment professional you know and trust in your community before doing anything stupid, and especially don't trade options you greedy Lamborghini chasing simp.