This Week in Episodic Pivots: Feb 5, 2023
Invest in these explosive trading setups
Thank you, Chairman Powell, The money printer may go brrrr yet again.
This is a meme that started in April of 2020… When the markets rocketed higher after the Fed started QE measures to save the stock market from the lockdowns. QE, being another term for money printing, led to this nice meme.
And Wall Street believes this may happen again. And the markets ripped higher in anticipation of the money printer turning on again.
Now the market did pull back on Friday. And that should give us a cause for concern. We’re making money too easily right now. Just about everything is up, and we’ve got some big winners. We’ve doubled our money in SoundHound (SOUN) in just two weeks. Congrats to anyone who followed us in on that trade!
While these are the kind of moves we hope to find, we shouldn’t have a portfolio full of stocks in the green.
Money is coming too easy. And I’ve seen some stats showing that retail participation (investors like you and me) are at the highest they’ve been since the Gamestop and AMC mania a couple summers ago.
That should give cause for concern. It means the mainstream investor is getting sucked back in the market. They’re feeling a since of FOMO (fear of missing out). And they may be going irresponsibly long into this market.
That’s just what institutions need to see… They want people like you and me to buy their stocks when they sell.
We want to follow the trend though. And that trend is higher. But I have a feeling we’re about to see how robust our trading system is….
I think we have well-defined stops for all of our positions, so keep a close eye on the stops.
Portfolio Update
All of our open positions are in the green at this moment. And the average gain on our open positions in 25% right now. That’s quite incredible.
Last week Energy Vault Holdings (NRGV) pulled back and we got stopped out on Tuesday at $4.38. That gives us a disappointing 3% return – especially as it was up 18% the first week we owned it. But we must follow our stops.
As for the rest, we are good to keep holding the remaining 9 open positions. I don’t have much else to say about the portfolio than that.
So let’s take a look at this week’s new positions.
LumiraDx (LMDX)
LumiraDx is a diagnostic company making tests for several common conditions. While this doesn’t sound exciting, a development last week turned the company around.
This company is most known for its COVID-19 tests over the past couple years. Now to piggyback off that they a blood assay to determine with 12 minutes if a patient elevated peptides that are indicative of congestive heart failure.
Without knowing the stats offhand, I believe the world has seen an increase in heart attacks since the pandemic started. So this is likely a good business to be getting into.
Like most trades, this will be short-term. So I’m not too worried about the high debt levels and the fact the company is burning cash. Nor are we concerned with the Nasdaq letter of delisting they received last week… With the price surge to $1.20 at the end of the week, the stock is no longer under risk of getting delisted for trading under $1.
But look at this beautiful breakout on high volume. We’re going to use the 50-day MA as our initial stop loss.
JetBlue Airways (JBLU)
JetBlue had a massive trading day on high volume and Thursday. The news was that their groundworkers decided against joining the machinists union… Which would have likely led to higher costs for JetBlue.
So that’s a win for shareholders. And I’m also betting that JetBlue will get a boost in travelers this month from the budget travelers who are going to avoid Southwest after their boondoggle over the holidays.
And this breakout gives us a nice tight stop. We should use $8 as our stop until the 50-day MA crosses over it. Then we’ll switch to the 50-day for our stop.
And that’s all for this week.
For any questions during the week please tag me in a post on Twitter @BarbellAlpha