Markets closed mostly lower on Tuesday, with the S&P falling ..40% while the Nasdaq tumbled over 1.3%. Asia markets closed mixed overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a bounce while the Dollar, Yields, Oil, and Gold are all lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-167/
I am working on my Top 5 Stocks for 2023 Webinar. I will be putting some of the names I am researching in the #2023-ideas channel in the chatroom. Feel free to add any names you think may outperform in 2023 or any comments you may have. Thanks in advance!
Stocks reversed opening gains yesterday to trade lower into the 10am hour. They then chopped around for the rest of the session, failing to find a sustained bid - tech names took the brunt of the selling once again. There was no true catalyst to speak of besides possibly more positioning by traders into the end of the year. Will be interesting to see if today's gap higher can hold. I still think some type of Santa rally is in the cards, especially with so many names down 60, 70, and 80% YTD. Seems many folks want to claim, 'I told you so' these days. The same folks who have been blasting their 'Short the Market' trumpet for the past 10 years. Take TSLA for example, the stock is having its worst month ever and its RSI is in unprecedented territory... 17. That is nuts. Despite that, the stock is still up 1500% over the past 10 years... so the TSLAQ crowd, who will tell you they are killing it, would have had to start their short at the end of 2021 or anytime in 2022. Most these folks patting themselves on the back have been bearish on TSLA for years.
Anyway, off my soap box. Was hoping the SPY would break its 50dma at $386 and come and test $390 before weeks end. Yesterday's action put a damper on that possible outcome. Will need the gains to hold today and maybe $386 comes tomorrow. If we reverse the morning gap, I fear $370 and below comes into Friday. Will use TZA calls as a hedge for that outcome if we break $380 again today:
I went and added BIDU calls at the open yesterday. Not a big fan of BIDU but think the removal of Covid restrictions should put a bid in China ADR's. The BIDU chart looks great with a possible test of the $125 handle if the market cooperates. I was able to close some of calls to cover some costs and will look to close some more today. Will use the $115 handle as a possible stop area:
I also went and added some speculative ALGN calls. The stock remains in an uptrend despite the market weakness, and seems oddly bid - either a stake holder or the company is buying stock. If markets find a bid would not be surprised to see this rally north of $220 in the coming days. May actually look for some more strikes into 2023:
It was a rough session for ZYME and VKTX, with ZYME closing off nearly 7% and VKTX finishing the day off 4%. VKTX still looks great here but would want to see it close above $8 today:
ZYME closed right at the $7.50 support. Will need to find bidders here and think $10+ comes in the coming weeks:
WING and CMG both closed off over 1% yesterday. Still have on watch for potential calls as outlined on yesterdays watchlist.
Also adding IBM and EXAS today. The DOW has outperformed the other indexes as folks flock to safe havens. IBM traded to $153 in mid-december and think a move back over $150 is possible if the markets finds a bid:
EXAS is a name I have watched for a while now. Some negative news from a competitor pushed the stock higher a week ago. It has sold off since then. Think it can find a bid back into the mid-$50s and beyond in the next week or two, so will look for some calls to play for that move:
Here are the analyst changes of note for today(not many during this holiday week):
|Celldex has key catalysts in 2023, says Cantor Fitzgerald|
|Cantor Fitzgerald analyst Kristen Kluska reiterates an Overweight rating on Celldex with a $55 price target as part of her "New Year's Countdown" of 10 stocks with 2023 catalysts that should be on investors' radar. Celldex's barzolvolimab has been one of the most followed clinical candidates in the space, and 2023 should bring updates across multiple indications, potentially starting in February, Kluska tells investors in a research note. She believes investors see opportunity for barzolvolimab beyond chronic spontaneous urticaria and chronic inducible urticaria|
|Janney starts Generac with a Buy, sees core HSB headwinds priced in|
|As previously reported, Janney Montgomery Scott analyst Sean Milligan initiated coverage of Generac with a Buy rating and $160 fair value estimate. The core residential home standby, or "HSB," generator business is in the early stages of a downturn, but with shares down about 80% from their peak Milligan feels this "has already been discounted in the share price," he tells investors. The shares now trading at a discount to industrial peers presents a "free option" on clean energy growth, argues Milligan, who also sees consistent free cash flow generation and buyback potential providing potential support for the stock and balancing out near-term concerns for residential HSB market trends|
|Wedbush reiterates Underperform on Carvana on weakening results, liquidity|
|Following recent data points including CarMax's (KMX) Q3 results last week and no Q4 Carvana (CVNA) ABS deal, Wedbush analyst Seth Basham reduces estimates further below consensus for the latter. CarMax painted a bleak near-term industry picture, highlighting that many competitors were sharply cutting prices in order to reduce bloated high-cost inventories in a falling price environment. With used car price declines potentially accelerating, there is nowhere to hide, Basham argues. Carvana entered the quarter with 87 days of inventory, and the analyst's web-scraped data indicates that figure has unfavorably increased as its sales have floundered further and inventory units for sale have only modestly declined. He now forecasts 85k retail unit sales in Q4, down from 94k previously and versus consensus' 96k. This is a 25% year-over-year decline, which would fall well short of the industry's high-single-digit decline and CarMax's 21% decline, and mounting share losses could be driven by tightening credit, lower advertising and operational/brand challenges. Although bankruptcy is not likely imminent, weakening results and liquidity lead the analyst to reiterate an Underperform rating on Carvana's shares with a price target of $1|
|Teleflex price target raised to $295 from $280 at Stephens|
|Stephens analyst George Sellers raised the firm's price target on Teleflex to $295 from $280 and keeps an Overweight rating on the shares. After valuations peaked in Med Tech in 2021, they declined throughout most of 2022 and after a volatile year he expects many medical device companies to use Q4 earnings season and conferences early in the year to reset expectations for 2023 lower, Sellers tells investors. While this is a headline risk to many of the companies he covers, he believes resetting expectations will allow companies to return to an environment where estimates trend higher throughout the year, Sellers added. Into 2023, he prefers companies that either expect to receive FDA approval for a device or treatment or that are new entrants to an existing market or geography, the analyst noted.|
Generac initiated with a Buy at Janney Montgomery ScottJanney Montgomery Scott analyst Sean Milligan initiated coverage of Generac with a Buy rating and $160 price target.
Tilray estimates lowered on softer beer sales at Piper Sandler
|Piper Sandler analyst Michael Lavery says an unfavorable currency exchange rate, softer than expected beer sales, and some lost distribution for hemp foods are weighing on Tilray's sales momentum in fiscal Q2. Market share in Canadian recreation use appears to be stabilizing, though the company remains well below its mid-teens share from a year ago and price compression remains a headwind, Lavery tells investors in a research note. He reduced sales estimates to better reflect softer U.S. beer sales, which he says are trending worse than expected, especially Sweetwater's launch in California. Lavery keeps a Neutral rating on Tilray shares with a $3 price target.|
And here is what I am watching today: EXAS, ALGN, IBM. HUM, CI, WING, CMG, ROKU, SQ, VKTX, NFLX, PTON, BYND, ALGN, ULTA, BLK, RARE, AYX, SPOT, BURL, WYNN, U, and TWLO.
Let's have a great day!