Daily Plan 6/9/23
The Casino is Open
Hi traders-
The highlight of the day today for me was the CVNA stock.
If you remember, this was shared by me for around 3 dollars. I reiterated that I liked the action in this stock near 11 bucks, and today, it decided to jump 60% and close the day near 24 bucks.
I think the fate of this stock next hinges upon if the company decides to make an offering - which I think they will at some point. I find it funny that this is just one of those stocks that I feel has absolutely nasty fundamentals. Yes, this did not stop it from adding about 2 billion in market cap in a few days.
What prompted this rally was a sizeable short squeeze in this stock. By some estimates, half of the 100 million shares in the stock are short! This is a recipe for disaster for these naked shorts.
Anyways, I find it assuming that CVNA is not a stock that comes to my mind when I think of a respectable buy-and-hold investment in my portfolio. I am sure many others feel so too. However, that did not stop this insane move. It really all comes down to these financial shenanigans. I mean this action, for a stock of a company like this to go up 60% in a few hours, is not based on any fundamentals but really it underscores the casino-like structure of this market right now. This just underscores my point that the ample liquidity in the system is alive and well.
On the part of Orderflow, I saw bullish activity near 3 and 11 dollars and alerted the folks BEFORE this massive move in the stock.
I think now this stock is in a space where there may be a sudden drop of 20-25% if the stock gets more diluted. However, until I see one, I think these shorts may get more squeezed!
I personally think these short-term options are exciting and can feel like they are fun once the cat is out of the bag - like CVNA today. However, in my view, the actual move may take weeks to months to fully bake. It is only towards the tail end that we see these types of spikes. Unfortunately, most of the options nowadays are like a week or less to expiry. I think very hard to box the entire move in a week or less! Below are just some of these examples.
Apart from CVNA, with respect to BA, I had shared that I like the price action in Boeing at 200. This stock is now 220.
I had shared a key support level in ROKU at 40, where I thought the action looked promising. That stock is now like 70.
I was bullish on TSLA at 196. I had then shared most recently the 216 key level which saw TSLA make another push higher into 230 within weeks.
In the same vein, I had shared potential support for PRVA near 20, and that stock jumped 10% today.
Then, a few weeks ago I liked the action in both WAL and PACW at 25 and 4, respectively. These are now above 40 and near 10 respectively.
I have been sharing a lot of these ideas as and when I see them, but the thing is that they are not short-term time frames. If you look at my ROKU call, I shared this level in November. It is June now.
With emini and the NQ, I have been sharing levels on both of these recently. Both levels were quite good from last night. On top of that, at the opening, I had expected to sell down to 4255 on Emini and expected the intraday buyers to step in there; we did sell down to nearly 4264 but then rallied from that level.
Now, tomorrow is Friday. And then Monday, just like tomorrow, is a low-risk event day. The main risk events are on Tuesday and Wednesday with CPI and FOMC.
As of today, I have not seen a test of either the upper or lower weekly levels, as the market has stayed between these two levels all week.
Unless we break out of these levels on heavy volume, this trend may continue till Tuesday.
My key levels for tomorrow will be 14459 on NQ and 4280 on ES.
Scenario 1: I think if we are trading below 4280, we could target and retest 4255.
Scenario 2: I think 4280 may be support for a test of the 4300 area. Upon an intraday close above 4300, we could see 4325 tested. AT the time of this post, we last traded 4295.
Out of this, 4325 and 4255 are key levels from a longer time frame (weekly).
LYFT
One name which I totally forgot to share last month was that of LYFT. LYFT is the domestic cousin of UBER, which has of late done very well. I shared UER support at 30, it is 40+ now. LYFT has better service, better ride-share cars, and it is better for drivers - which must mean that it languishes compared to UBER ;)
I do think this 7.5-8 may be a good support for LYFT. It is now near 10.5. Fundamentally both companies lose money hand over fist to eliminate the other. It is up now about 20% from where it first showed up on my scanner but I do want to say 7.5 is a firm LIS.
UPS/Freighters
Another theme for me is the Freight companies as well as logistics names like FedEx.
With the Eurozone in recession and a collapse of Chinese exports as reported last night, I will be curious to see how it impacts American logistics companies.
My LIS on $FDX will be 233-235, it is 226 right now. With targets near 200.
Do note that they report earnings on the 20th.
I am offering a one-time discount below to make it easier for folks to read this post. It is the largest of my discounts offered. Don’t miss it.
On an admin side note, I have not been able to check the comments as I have been quite busy with a couple of other things in parallel. This is why I have not even been checking the replies as I can not monitor each and every comment and reply to it. I am hoping to open them up as soon as I free up :) Note I can not answer any specific questions on any of the tickers that I share as our time frames and targets may be very different. The way this blog is structured is that these Daily plans are more geared for short-term and intraday levels. The weekly is more educational and longer-term oriented. Like I have readers from all over the place with time frames from a few minutes to years. Some only trade options, some only futures, some both, some only stocks, and then some only commodities. It is really hard to have one answer fit all. I have considered splitting the blog into 3 substacks- one each for stocks, options, and futures but that would end up being a lot more work for me and I do not want to go that route. This is why I would say if there are 4 of us in the comments - each one of us may have a very different time frame.
~ Toc
Disclaimer: This newsletter is not trading or investment advice but for general informational purposes only. This newsletter represents my personal opinions which I am sharing publicly as my personal blog. Futures, stocks, and bonds trading of any kind involves a lot of risk. No guarantee of any profit whatsoever is made. In fact, you may lose everything you have. So be very careful. I guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC, or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. By reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are courtesy of Ninja Trader, FinViz, Think or Swim, and/or Jigsaw. I am just an end user with no affiliations with them. Information and quotes shared in this blog can be 100% wrong. Markets are risky and can go to 0 at any time. Furthermore, you will not share or copy any content in this blog as it is the authors’ IP. By reading this blog, you accept these terms of conditions and acknowledge I am sharing this blog as my personal trading journal, nothing more.