January 4th, 2023 Watch List

Markets fell to start 2023, with the S&P closing down .40%. Asia markets closed mixed overnight with China markets soaring while the Nikkei finished off over 2% while Europe indexes are rallying this morning. U.S. futures are pointing to a higher open, the Dollar, Yields, and Oil are lower while Gold is higher.

This is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-171/

And my rant from yesterday if you missed it: https://www.optionmillionaires.com/jb-morning-rant-january-3rd-2023/

And if you haven't checked it out yet, here is my Top 5 Stocks for 2023 Webinar: https://www.optionmillionaires.com/top-5-stocks-for-2023-webinar/

Markets opened higher yesterday morning, only to reverse course after the first ten minutes, with the Nasdaq and S&P both falling over 1% at times on no news to speak of outside of nasty sell-offs in TSLA and AAPL. Stocks found a bid in the late afternoon and closed off their lows but still not the type of session one would want to see after 2022's performance. Markets are pointing to a higher open this morning, hoping we do not have DeJaVu here. I was happy to see the SPY at least reclaim that $380 handle into the close. Would be a good sign if markets can muster a rally today and tomorrow and get back over that 50dma at $387.95:

I used yesterday mornings gap to close out some of my SQ calls for 150%. Will hold the rest for the possible move up past $70 in the next week or two and will continue to look for strikes into Feb to encompass their earnings:

It was a rough session for VKTX, reversing over $1.34 from the highs before finding a bid to close down over 8%. Not surprised that there would be a pull. If it hold $8 today, will look for some more strikes to play for a move into the teens in the coming months:

U is one I have been watching for the last 8 months or so. The stock has a history of some wild multi-day bounces off of lows. It did a $20 bounce in the mid-summer and another one in mid-November when it bounced from the $21s to the $42s in 2 weeks time. Will be watching for an opportunity to add some bounce calls if it holds $26 or so for a move into the $30s in the next week or two:

ISRG has consolidated its earnings move from October and looks poised for the next leg above $280. The stock has also been on the receiving side of numerous analyst upgrades and PT raises, including another today. May look at some weekly speculative calls for a move to $280+ and/or some strikes pas their earnings date of Jan 24th. ISRG is a cash cow... tons of cash and no debt - the type of company that does well in this envirnoment:

And lastly, SPOT looks very interesting here and possibly in the midst of breaking its downtrend. If it can reclaims $82 or so today, think a move past $90 is in the cards in the coming days. May look to add some strikes for that possible move today:

Here are the analyst changes of note for today:

Demand issues, Twitter focus creates 'perfect storm' for Tesla, says Wedbush
Wedbush analyst Daniel Ives notes that the major selloff in Tesla (TSLA) stock post softer Q4 deliveries was clearly an ominous start for the company to kick off 2023 after a horrific 2022 for the stock with a black cloud now forming over the story. The major worry now overhead for Tesla is that the demand story especially out of China is showing heavy cracks in the armor at a time that EV competition is steadily increasing domestically with NIO (NIO), Xpeng (XPEV), and others fighting for a smaller pie with the Chinese consumer weakening, Ives argues. With China representing 40%-plus of the global growth story for Tesla, this is a heavy concern for the Street which will likely result in more significant price cuts over the coming months to spur demand as a potential pricing war takes place to gain market share in a darker macro backdrop, he adds. The analyst believes the demand issues combined with Musk's Twitter focus creates a "perfect storm." He has an Outperform rating on Tesla's shares with a price target of $175

Apple price target lowered to $175 from $200 at Wedbush
Wedbush analyst Daniel Ives lowered the firm's price target on Apple to $175 from $200 and keeps an Outperform rating on the shares. With the fears of a softer holiday December quarter around the corner on China supply chain shortages, the Street continues to sell off the stock in an unabated fashion with worries around an uncertain 2023 ahead for Cupertino, the analyst notes. His Asia supply chain checks are clearly mixed heading into the next few quarters and Cupertino appears to be cutting back on some orders around Macs, iPads, and AirPods over the coming quarters to reflect a softer consumer backdrop. That said, the core iPhone 14 Pro demand appears to be more stable than feared and is still coming out of the supply chain abyss seen in November/December due to the zero COVID lockdowns in China, Ives adds. While March and June could see some cutting of iPhone orders, he believes the overall demand environment is more resilient than the Street is anticipating and thus thinks baked into the stock is a massive amount of bad news ahead
Macy's price target lowered to $23 from $24 at Deutsche Bank
Deutsche Bank analyst Gabriella Carbone lowered the firm's price target on Macy's to $23 from $24 and keeps a Hold rating on the shares. The analyst anticipates holiday apparel retail results to be generally in line with Street expectations. The majority of retailers guided Q4 margins appropriately as most anticipated an aggressive promotional environment given inflated inventory levels across the marketplace, Carbone tells investors in a research note
Starbucks price target raised to $112 from $104 at Cowen
Cowen analyst Andrew Charles raised the firm's price target on Starbucks to $112 from $104 and keeps an Outperform rating on the shares. The analyst said it is his best name under coverage to benefit from a China reopening and he sees a 2023 rebound of China sales volumes & International company-owned margins to 2019-levels leading to ~$0.34 of incremental EPS versus consensus 2023E EPS
Needham upgrades Etsy to Buy, sees positive earnings revision revive multiples
Needham analyst Anna Andreeva upgraded Etsy to Buy from Hold with a $160 price target. The stock underperformed in 2022 as multiples contracted, but the company's operating model is proving to be "sticky" exiting the pandemic, the analyst tells investors in a research note. Andreeva adds that with pandemic demand having been mostly lapped and sell side estimates being "in a good place", Etsy's positive earnings revisions and multiple expansion should drive share upside from here
Needham upgrades Stratasys to Buy, sees valuation reflect more challenging 2023
Needham analyst James Ricchiuti upgraded Stratasys to Buy from Hold with a $15 price target. The company has exceeded consensus estimates for revenue in seven of the last eight quarters, while delivering five consecutive quarters of positive earnings, the analyst tells investors in a research note. While 2023 brings a more challenging demand environment with lengthening sales cycles and an uncertain macro backdrop, this is "more than priced into the stock", Ricchiuti adds, noting that Stratasys shares are trading at the lowest valuation levels in recent memory based on several metrics

And here is what I am watching today: SPOT, ISRG, SQ, GNRC, VKTX, AXSM, UDMY, MASI, RARE, SAGE, ALGN, IBM, CMG, ROKU, NFLX, PTON, BYND, and BLK.

Let's have a great day!


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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