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Saturday, September 19, 2020
3 Trending Stocks Set to Rip Even Higher
Edward Lance lorilla,
How can traders increase their probabilities of success?
Forget about trying to time the dip.
One of the best ways is to identify where the market is RIGHT NOW, and buy into that.
With the help of tools like these, JC's able to spot trades with good risk/reward.
Like these trade ideas he has on tap right now, which are getting some buzz in the headlines …
KODK:
KODK is by no means a newcomer to traders' watchlists, but let's quickly recap the basics:
In late July it ran from low $2s to $60(!!!) in 2 days and combined 550M share volume on news of a $765M government loan to set up drug production facilities.
Soon thereafter, it was discovered that top executives got massive options packages right before the announcement.
After much bad publicity, the loan was put on hold and multiple investigations were launched.
Stock's been drifting lower ever since, eventually settling in $5.7- $6.3 range.
Recent developments:
2 days ago, KODK announced an independent special committee found no violation of law in connection to the loan announcement.
Multiple huge unusual CALL options sweeps throughout yesterday and the day before.
Volume is back— close to 300mil shares traded in the past 2 sessions.
Trade plan & outlook:
We love the combination of news-insane volume-options activity and relative strength on day 2.
Our plan is to be long on reasonable dips— if the stock opens at 20 and sells to 17, that's not a reasonable dip; if it opens at 12 and then consolidates in low 10s, we'll likely be in against 9.5s
Assuming it doesn't fail, don't underestimate how far this can go. That said, we will be taking profits along the way and the faster it goes— the more we will sell.
NIO:
Let's face it, NIO is not just an EV maker— first and foremost, it's a HEADACHE!
Stock's done nothing but grind higher providing no dips to get in.
For shorts, on the other hand, it's been an absolute account destroyer.
Yet, where there are emotions, there's always opportunity.
So let's have a closer look:
Chinese EV maker
One of the prime beneficiaries of EV hype— at $2s in March, nearing $20s now
No game-changers, but continuous positive news flow— good deliveries, decent earnings, regular upgrades
Recent 88.5M shares offering at $17— unbelievable price, given stock's been at $7 just a month prior
Recent developments:
Relative strength during overall EV selloff with TSLA at the forefront
Spectacular hold near the all-time highs
Unusual options activity throughout the week
Trade Idea & Outlook:
It's hard to get in if you aren't in already, but no reason to not be long one of the strongest stocks out there.
Don't chase it but we are a small buyer against $15s and will be adding if stock holds above $20, making $20 our new line in the sand
The stock's been on a notable trend - if it breaks, we're out immediately
SNOW:
As a bonus, SNOW isn't a traditional watchlist item, given it only started trading 2 days ago.
Therefore, we'll only provide an update to our outlook based on what we've seen so far:
Too early for us to make a trade with any size above minimal, we still want to see it range out
As is common sense, we're leaning short— company that was worth $12B in February isn't worth $63B right now and definitely not worth close to $100B it was at $319.
We're happily but carefully shorting intraday pops
Our goal is to not get biased and oversized— a lot more obvious short picks have destroyed accounts
Big picture, we want to be short close to $250 with a hard stop at $280
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