December 6th, 2022 Watch List

Stocks tumbled on Monday, with the S&P losing 1.7% on stronger than expected PMI numbers. Asia markets closed mixed overnight while Europe indexes are slightly lower this morning. U.S. futures are pointing to a slightly lower open as I write this, Yields, Oil, and the dollar are in the red while Gold is higher.

And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-154/

It was a tough start to the week, with stocks trying to bounce off the opening lows only to find pressure after the 10am read on PMI that came in better than expected. Again, it feels like the Fed will not be happy until they push the U.S. economy into a deep recession and drive higher unemployment. The positive PMI number coupled with the stronger jobs report on Friday have folks thinking the Fed maybe back to a .75% hike next Wednesday. The SPY couldn't hold the 200dma and broke under $400. If that 200dma is not reclaimed in the next day or so, another leg to $380 or so is in the cards:

Was eyeing NFLX and LULU yesterday. NFLX actually looked strong after the open even on the weak tape. It broke into the $320s early but then found pressure for the rest of the day to close at $312. Will be a key session today. If it can reclaim $315 or so I may look at some calls to play for some continuation. Otherwise will pass and revisit:

LULU also closed down yesterday. Still think this can be a nice play for premium build into earnings. Will be watching again today for an entry:

SAM couldn't find any support yesterday and closed off over 2%. Sure enough this morning it received its first analyst note in a month with $DB downgrading the stock although it raised its PT. Going to make it an even tougher road for my calls. Not sure I will add any lower strikes as of yet unless it goes red to green today:

PTON and RARE both held up relatively well yesterday despite the market weakness. Will continue to hold those.

Lastly, BURL had a positive note out from BAC. Could be the kick it needs to get above $210 and possibly $220 in the next week or two. Will be looking at some calls:

Here are the analyst changes of note for today:

Lyft price target lowered to $15 from $25 at BTIG
BTIG analyst Jake Fuller lowered the firm's price target on Lyft to $15 from $25 but keeps a Buy rating on the shares. The analyst notes that while the company's October was "strong", he is also seeing below-seasonal trend in November and a moderation in sales growth quarter-to-date. Fuller is also updating his model to better reflect rising insurance costs and the impact of recent cost cuts, with the net result being a reduction in EBITDA from $707M to $608M. Longer term, the analyst remains positive on the stock, stating that Lyft should emerge from the pandemic on stronger footing with a clear path to profitability that may not yet be fully reflected in consensus profit expectations
Dick's Sporting price target raised to $140 from $130 at Argus
Argus analyst Chris Graja raised the firm's price target on Dick's Sporting to $140 from $130 and keeps a Buy rating on the shares. The analyst cites the company's stronger than expected Q3 results as well as the management's view that participation in outdoor activities has increased and that consumers have a greater preference for athletic apparel. Graja is also raising his FY24 EPS view on Dick's Sporting by 25c to $12.25

United Airlines upgraded to Buy at Argus amid recovering air travel demand
Argus analyst John Staszak upgraded United Airlines to Buy from Hold with a $52 price target. Demand for air travel should continue to recover from the pandemic with "strong growth" expected in business and international travel, the analyst tells investors in a research note. Staszak further notes that United Airlines should benefit from constrained industry capacity due to delayed aircraft deliveries, boosting his FY22 EPS view to $2.00 from $1.30 and his FY23 view to $5.80 from $5.40

United Airlines upgraded to Buy from Hold at Argus
Argus analyst John Staszak upgraded United Airlines to Buy from Hold with a $52 price target.
Lyft price target lowered to $15 from $25 at BTIG
BTIG analyst Jake Fuller lowered the firm's price target on Lyft to $15 from $25 but keeps a Buy rating on the shares. The analyst notes that while the company's October was "strong", he is also seeing below-seasonal trend in November and a moderation in sales growth quarter-to-date. Fuller is also updating his model to better reflect rising insurance costs and the impact of recent cost cuts, with the net result being a reduction in EBITDA from $707M to $608M. Longer term, the analyst remains positive on the stock, stating that Lyft should emerge from the pandemic on stronger footing with a clear path to profitability that may not yet be fully reflected in consensus profit expectations
Oppenheimer remains very positive on AWS long-term despite macro weakness 
After attending AWS annual re:Invent conference last week, Oppenheimer analyst Jason Helfstein believes AWS continues to position itself as the operating system for Cloud through cloud native serverless, as Windows/Linux/mac have previously done. Improvements to proprietary infrastructure on both compute, networking and software, is a significant competitive advantage, with its new Nitro v5 networking chip and Graviton3E processor the latest material updates and major network and service upgrades to the edge, Helfstein says. The analyst also notes that AWS continues to work with customers to optimize Cloud bills, but contrary to prior re:Invents, AWS was radio silent on price cuts, with his checks suggesting price hikes are more likely. He remains very positive on AWS long-term, but checks suggest macro weakness started in September and continues

And here is what I am watching today: LULU, BURL, NFLX, , COST, SPOT, ROKU, DIS, DKS, U, TWLO, WING, CMG, and DPZ.

Let's have a great day!

-JB

JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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