The company operates on a freemium model, offering both free ad-supported and premium subscription tiers. Spotify reported strong second quarter results for 2024, exceeding expectations in several key areas. They saw higher-than-expected premium subscriber additions and achieved better-than-guided gross margins. The streaming giant is showing promising signs of improved profitability, aligning with their long-term goals for gross and operating margins. It is expanding beyond just music streaming, with significant investments in podcasts and audiobooks to diversify their content offerings. They're also exploring AI-driven personalization features to enhance user experience. But I care less about that, and more so on the setup. After its earnings in July shares spiked above $340 from the $295 level. But sold off with the rest of the market in early August dropping to $300. It quickly rebounded back to the $340s which it has been consolidating for the past couple weeks. And that's exactly what I'm looking for from earnings winners. After the big move up, I want to see if it can hold the new level and consolidate– which I do believe it did well. Shares are now making a run to its 52-week highs which is $359.38. Why do I think it has a chance of getting there and getting new 52-week highs? The stock is currently in a daily squeeze. A squeeze can signal a potential big move in a stock after a period of low volatility. Think of it like a pressure cooker - the longer the steam builds up inside, the more explosive the release when the valve finally gives way. Overall, I think the setup is there, and the chances of it going higher are likely. However, with NVIDIA earnings tonight, I do think it will have a significant influence on the tech sector overall. So that's something to be aware of. Your Action Plan: I'm watching SPOT for a potential long in my Daily Profits Live Portfolio. If I do take it, I will be using call options to express my position. The stock has a good chance over the next week or two to break above its 52-week highs, with stacked EMA's and a daily squeeze working in its favor. If you'd like to learn more about my trading style and how to watch me in Daily Profits Live, check this out. |
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