Market Outlook - Janurary 17th 2019
This is an introduction to outlooks on the stock market that I will be writing on opportunities that I see within the market. These ideas are my own opinoins and are not to be taken as professional advice.
SPY
There are a few things that I am finding interesting with the SPY lately. One of these things being the obvious, we are running into resistance at every step higher. While I am not much of a technical trader I know many are and keeping lines on the chart help me recognize areas that others are watching. With SPY jumping over the 260 level in the last few sessions I am looking for either contiuation or a fail here. Many traders are looking to top tick the short on SPY and other names, which is leading to more of a melt up as they get squeezed. While the long side is running out of steam you have to respect that all the dips are being bought up so why fight the trend?
AAPL
AAPL is one of the names that I have been watching everyday since they released earnings. It has been quite weak in the recent rally in tech only rebounding 8% from lows while others have rebounded 10%+. There are a couple of things that I am watching here on this name. For one I am watching NFLX earnings. If NFLX hits I want to see how the reaction is for AAPL. Does it sell off, or does it hold its' gains and squeeze? I am also watching for option activity here with some size coming into shorter term expirations. This will show me that there is some confidence in this name otherwise I am short biased right now.
NFLX
This is an interesting one, rebounding 34% from the lows in Dec. you would think it is time for a pullback? While yes I believe it does need to take a breather that isn't a good enough reason for it to. There are a few things at play here: first is the SPY, overeager shorts are getting squeezed and we are in a melt up scenario currently. The second is the earnings, there is a $26 move expected... There are a few things that I am looking for. First if they crush earnings I am looking for the gap, does it sell off, or does it squeeze shorts that say "this must pull back"? Both scenarios are in play and depend on the number.
TLRY
This has been a fun stock to watch and trade since IPO. It is very obvious to me that we will not see highs anytime soon. While this is not guaranteed I find it to be highly probable. So the question becomes when do you short to maximize your profits? With the recent news of their biggest shareholder not participating in the lockup until the 2nd half of the year this name becomes interesting. On 1/15 it is quite obvious that someone dumped a lot of shares right at the open but since then vol. has been light and holding nicely. While shorts may think they have this in the bag I think a squeeze could be in the works. This is all based on the SPY of course and if the SPY can hold I think some shorts are getting a little too confident.
GOOGL
Last but not least GOOGL, this one is at a key technical level. Running into resistance time and time again it has been chopping around in a range here. Over the last two weeks, there has been some interesting options activity going on in both GOOG and GOOGL. The reason this is interesting to me is usually when GOOGL or GOOG sees size in the options they seem to be right on the money. This one is on watch for long side play but with SPY continuing higher the risk for the long play becomes greater and greater, so this one is at your own risk.
Once again this is not professional advice and should not be taken as such. Just a guy with ideas that he feels like sharing to help those and keep himself accountable. Leave a comment if you would like more of these!