This Week in Episodic Pivots: October 29, 2023

We've got a new trade this week

The market sure played a trick on investors the week before Halloween.

But luckily for us, we were mostly sitting in cash. We only had four positions going into the week. We closed MoneyLion ( ML 0.00%↑ ) and ESS Tech ( GWH 0.00%↑ ) on Monday. And we got stopped out of Sea Limited ( SE 0.00%↑ ) on Friday. That’s disappointing because that stock was up initially… I need to think about taking profits a little sooner when the market starts chopping around.

That leaves us with just one position HighPeak Energy ( HPK 0.00%↑ )

This week we’ll have a new position to enter.

I believe the market is due for at least a bounce here. From a technical perspective, we are at a very important level in the market. The market has retraced 50% of the gain from the October lows last year to the July highs.

A 50% retracement is when many pullbacks in a bull market end. It’s common to shake out some of the weak hands before starting the next leg higher. And if we look at the chart below, we can see the 50% retracement line (green) is near 4,090.

This is also the level where the market spent the first four months of the year. So there is a lot of support there as well.

So I would expect to see the market at least slow down its descent here. And there’s a chance it uses this level as a bouncing point for another leg higher. As regular readers now, I find that unlikely. But we will continue purchasing strong stocks in any market.

Now onto our new recommendation.

Impinj ( PI 0.00%↑ )

Impinj makes radio-frequency identification (RFID) tags that retailers use to identify, locate, and authenticate items.

Now one would believe with the increase of shoplifting and organized thefts plaguing retailers this kind of solution would be helpful. And you would be correct.

The company just reported earnings last week and they completed the trifecta. They beat their third quarter estimates on both revenue and net income AND guided higher for the fourth quarter.

This excited investors as it showed that the slowdown in Impinj’s business is likely over with. If that is the case, this stock could really find some momentum higher. And we want to be ready for that. Judging by the chart, $85 is a realistic price target right now. That’d be a nice 40% move higher.

Let’s keep a tight stop on this one because of the market conditions. And we’ll use the 50-day MA as our trailing stop on the position.

And that’s all for this week.

Happy Investing!