Futures are pointing to a rally to start the week, with the S&P set to open .90% higher as I write this. Asia markets closed higher overnight while Europe indexes are rallying this morning. The US dollar, Yields, Oil, and Gold are also all in the green.
And this is what UPB is reading this morning: Monday Morning Reads
Looks like Monday will continue the craziness in the Markets with GME, AMC, BBBY, and other highly shorted stocks finding a bid this morning. It also looks like the crowd is trying to push a Silver squeeze. Certainly not a new story with Silver and they have tried to use the same rationale in the past with Gold. There used to be calls for folks to ask for their physical Gold which would force a squeeze of a magnitude the world has never seen. Stories for other days. Not one to chase any of the stock pumps, nor will I be looking for puts on any of those despite the obvious dislocation with any possible valuation. But it is fun to watch and hopefully has tempered the hedge funds and ended the days of manipulating names. I keep thinking about IRBT... the stock killed earnings the last two quarters yet was sold off after the open. I would watch and wonder what the heck, did I miss something in the report? In hindsight have to think Melvin Capital (and others he shared the idea with) have been ruthlessly shorting the name and using leverage. And probably doing it for a long time. How many lost money trading calls on IRBT over the years and those strong reports? Karma is/was a b$tch.
EHTH pre-announced preliminary numbers after the close Thursday and it was a complete disappointment. The stock was pummeled on Friday. I was lucky enough to exit my calls earlier in the week and will likely take that name off my watch list for now:
I added some GLL calls at the end of the day on Friday. I think Gold is on the verge of breaking the $1800s in the coming weeks, especially on a move under the 50dma of $1850. Will use the $1900 level as a stop if there is continued strength today and tomorrow:
There are nearly 600 companies reporting earnings this week including AMZN and GOOGL... some implied moves:
Some implied moves for #earnings next week(1of2):$AMZN 6.4%⁰$GOOGL 6.2%⁰$CMG 6.7%$PYPL 8.5%$QCOM 7.9%⁰$EA 6.7%$SPOT 9.2%$SNAP 15.9%⁰$PTON 11.6%⁰$PINS 18.7%$PENN 12.9%$ABBV 4.8%$OTIS 7.1%$TMO 6.4%$NXPI 6.9%⁰$VRTX 4.1%⁰$WMG 10.7%⁰$CRUS 9.6%$BABA 6.5%$UPS 8.1%
— Option Millionaires (@OMillionaires) January 30, 2021
I really love the CMG setup into earnings tomorrow after the close but the premiums on the calls make it nearly impossible for how I trade. Will be watching Wednesday morning for an opportunity to play for upside on a strong report:
EVBG has been finding pressure the last week or two and has closed lower for 6 sessions in a row after a downgrade at Credit Suisse. Should find a bottom here soon so may start to nibble some Feb calls for a move back above $150:
A nice piece on the rise of Commodities in Barron's over the weekend : https://www.barrons.com/articles/commodities-are-starting-to-rally-here-are-the-stocks-and-funds-to-play-it-51611958101
I don't agree with entire piece but there are some nice snippets on the Ag side, which UPB has been all over. Still have the last of my NTR March calls and may start looking at some June strikes today:
FCX also looks interesting. I haven't traded that name since 2009/2010. Eyeing the Feb $31 or $32 strikes:
Other names on watch today: DKNG, GILD, SQ, AXNX, and MED.
Here are the analyst changes of note for today:
| Wingstop price target raised to $175 from $140 at Wedbush | |
| Wedbush analyst Nick Setyan raised the firm's price target on Wingstop to $175 from $140 and keeps an Outperform rating on the shares. The analyst notes that his Q4 checks suggest same-store sales growth above expectations. He continues to view Wingstop's business model as among the best positioned to capitalize on a post-COVID acceleration in digital/delivery adoption in the near-, medium-, and long-term | |
| Norfolk Southern price target raised to $275 from $225 at Argus | |
| Argus analyst John Eade raised the firm's price target on Norfolk Southern to $275 from $225 and keeps a Buy rating on the shares. The analyst notes that while the pandemic has disrupted rail activity, more recent volumes have picked up and margins are again rising. Eade adds that the domestic supply chain will be more important than ever, and he views Norfolk Southern as a "critical link" of that infrastructure | |
| Caterpillar price target raised to $235 from $228 at Credit Suisse | |
| Credit Suisse analyst Jamie Cook raised the firm's price target on Caterpillar to $235 from $228 and keeps an Outperform rating on the shares. The analyst notes that the company beat Q4 consensus EPS by 17% adjusting for favorable tax and restructuring on better profits and inline sales. CI and RI segment margins stood out in his opinion, with both improving year-over-year 90bps and 160bps respectively despite sales declining | |
| Pinterest price target raised to $74 from $66 at Credit Suisse | |
| Credit Suisse analyst Stephen Ju raised the firm's price target on Pinterest to $74 from $66 and keeps a Neutral rating on the shares ahead of quarterly results. The analyst is also raising his advertising revenue forecasts based on positive advertiser checks signaling higher-than-expected budget growth | |
| PayPal transferred at Buy at Jefferies | |
| Jefferies analyst Trevor Williams assumed coverage of PayPal with a Buy rating and $280 price target. While he acknowledges that the stock faces a more difficult set-up after a 100%+ gain in 2020, he thinks the company's position as an e-commerce pure-play with a unique two-sided network support the long-term outlook, Williams tells investors | |
| Take-Two price target raised to $199 from $175 at Credit Suisse | |
| Credit Suisse analyst Stephen Ju raised the firm's price target on Take-Two to $199 from $175 and keeps a Neutral rating on the shares ahead of quarterly results. With the launch of the standalone Red Dead Online as well as the anticipated launch of the standalone GTA Online in the second half of 2021, Take-Two is in a position to expand the user acquisition funnel and hence audience for these two franchises, with the downstream potential impact being higher RCS revenue, the analyst contends. Ju believes that for now the competitive threat from Cyberpunk 2077 seems to have dissipated, although he finds it difficult to envision a scenario in which CD Projekt fails to address the current technical issues in the game | |
| Peloton price target raised to $175 from $130 at Cowen | |
| Cowen analyst John Blackledge raised the firm's price target on Peloton to $175 from $130 and keeps an Outperform rating on the shares. The analyst said his survey implies the At Home Fitness surge is likely to continue helped by ongoing COVID demand and a seasonally strong holiday period | |
| Omeros initiated with a Buy at UBS | |
| UBS analyst Colin Bristow initiated coverage of Omeros with a Buy rating and $25 price target. The company's Narsoplimab is the "central tenet" of the bullish thesis as the only drug to target the lectin pathway, which should allow for differentiation vs. other complement inhibitors, the analyst tells investors in a research note. Bristow adds that the market is underappreciating this asset, specifically its potential in IgA nephropathy | |
And here is what I am watching today: FCX, EVBG, CMG, NTR, DKNG, GILD, SQ, AXNX, and MED.
Let's have a GREAT DAY!
-JB