Daily Plan 9.6.23
Hello traders-
Slow day today with both the low of the day as well as high of the day capped between my levels with 2 way auction ending near 4500 on about a 25 point daily range.
The main attraction of the day was the action in TSLA which rose ferociously about 5% from my level to close as high as almost 260 only to close the day slightly softer at 256.
Good action in many other order flow names like ABNB which rallied hard today on backs of its inclusion into the S&P500. Similar good action like we saw in SABR which almost has doubled from my 2.5 dollar level.
With news tomorrow, the ISM Services should be in focus I think. Coupled with weaker action in Oil today as well as higher yields could keep the market on edge.
AFRM
With the inflation picture and credit card maxed out, a lot of consumer is now turning to the likes of AFRM and UPST for their credit needs.
I am not a big long term fan of AFRM, however, I think if it holds 20 level, we could see 25-26 tested on this lender of last resort. It is near 21 right now.
TSLA
With TSLA, a lot of push right now from price action perspective is coming from the recent price cuts. I think everyone has the same question at the moment- how much does it translate to new sales? And I think the answer is: a lot. Now, yes the macro picture is not too rosy for the car makers in general but you have to take this in context.
When you look at CVNA which I was a bull at 3 dollar, the macro could not have been worse for them at that time. Yet, the stock rallied about a 1000% YTD. Why? Because they were able to sell these cars and finance these loans at 10, 13, 14% APR.
SO even though this may be bad for the company in the long run, folks think in the moment and they say this looks great!
Personally I think TSLA sales will be lifted by these price cuts. Personally on top of that I think if I am a TSLA bear, I need to see that 240 go away. We are at 256 at the moment. I think as long as this 240 holds, we could test 280 upon a break of 260.
Speaking of CVNA…
I shared a technical level in CVNA around 37 which has been a key support. I think at the moment, 52 could be resistance on CVNA and as long as it remains below 52, I think we could retest 37-40. It is around 50 right now.
The main challenge for Carvana bears is that there are just too many of them. This has almost 36% short float and that has been a challenge for it to go lower than 35-40. In broader sense, this used to be an almost 400 dollar stock. So many of these shorts could have had an average price above where it sits right now. However any one who got in near 10-12 has been in pain last few months.
On the emini side…
I am still on September but should rollover at some point this week as I need to update both ES and NQ levels. I have been slacking.
Until then, my key level still remains from this weekly plan at 4500.
Scenario 1: as long as we remain supported above 4500, I do think we can target 4532 and a break of this could target weekly targets near 4560.
Scenario 2: The bears, IMO need to see us trade down below 4500 to target 4450s.
At time of this blog, we last traded 4500.
I think if tomorrow we get to see another 3-4 % day in TSLA, that is definitely keeping me out of being bearish on the session. If you have not already, read educational content about Tic TOP published by me about importance of mega caps in the session.
~ Tic
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