5 Stocks To Watch For The Week Ahead
Growth, Long/Short Equity, Momentum, Macro
Seeking Alpha Analyst Since 2014
I am Michael Kramer, the founder of Mott Capital Management and creator of Reading The Markets, an SA Marketplace service. I focus on long-only macro themes and trends, look for long-term thematic growth investments, and use options data to find unusual activity.
I use my over 25 years of experience as a buy-side trader, analyst, and portfolio manager, to explain the twists and turns of the stock market and where it may be heading next. Additionally, I use data from top vendors to formulate my analysis, including sell-side analyst estimates and research, newsfeeds, in-depth options data, and gamma levels.
HERE IS A FREE EDITION OF READING THE MARKETS WEEK AHEAD VIDEO. FEEL TO SKIP AROUND TO VIEW PARTS THAT MAY INTEREST YOU. THE CIRCLES ON THE TIMELINE REPRESENT DIFFERENT CHAPTERS
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Stocks – TSLA, WFC, GM, ZM, WMT
Macro – SPY, TLT
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- T.W.A. - Gamma Speculative Squeeze May Push Stocks Higher
- MIDDAY- HERE WE GO AGAIN, GAMMA, GAMMA, GAMMA!
- Morning Note- Euphoria
- Stocks Enter Bubble Zone
- Midday- As Long As You Know What You Are Up Against
- Morning Note – Waiting For The VIX To Fall
- MIDDAY – Bonds And The Dollar Don’t Seem As Excited As The Equity Market
- Link To Live Broadcast Starting 5 Mins
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA
Stocks appear to have broken out from their previous trading range with Friday's surge higher. The move higher was even more impressive because the market could stage an end of day rally to close at a high.
S&P 500 (SPY)
The chart for the S&P 500 seems to suggest an increase to around 3950 is likely coming over the very short-term.
Just how far equities rise may be determined by the bond market and how far yields rise. Or it may be the other way around; how far yields rise will be determined by how far equities allow them to. The 10-year broke out last week and is likely to climb even higher from here, with the potential to move to 1.4%.
This week saw a big drop in the TLT due to yields on the long-end of the curve rising. Based on this chart, the TLT could still be heading lower, perhaps to $148.75.
Tesla has rocketed higher, and the stock is getting to extremely overbought levels. Meanwhile, the implied volatility level has surged to around 91%, despite the stock rising. This is a classic sign of a convexity squeeze taking place. It could still go higher first, maybe to around $980, but be careful. This squeeze can unwind at any moment, and options expiration is on Friday. (Paid subscriber content - T.W.A. - Gamma Speculative Squeeze May Push Stocks Higher - first 2-weeks are free!)
General Motors (GM)
General Motors may be heading higher. This past week there was a bunch of bullish betting taking place in this stock, and it has a bullish continuation pattern known as flag pattern. I think it could be on its way to $52.80. (Should be free to read- General Motors' Stock May Be Ready To Surge Higher)
Wells Fargo (WFC)
This week, I noted in another story that Wells Fargo could be heading higher due to higher yields and wider spreads and based on some bullish option betting and a break out on the chart. An advance above $33.60 could send it towards $36.50. (Should be free to read - Wells Fargo Could Climb Even Higher)
Walmart has also struggled of late and could be heading lower, based on an overvalued stock, bearish betting, and a technical chart that suggests prices could fall to around $142.50. (Should be free to read - Walmart's Overvalued Stock Is Likely To Struggle Going Forward)
Zoom has continued to struggle, and the stock is again testing support at $342, with the stock's potential to fall to around $325. This stock isn't growing fast enough to support this ridiculous valuation.
Have a good one!
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