January 6th, 2023 Watch List

Markets closed lower on Thursday, with the S&P dropping over 1% after stronger than expected data including less than expected weekly jobless claims - good news continues to be bad news. Asia markets closed mixed overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a lower open, the Dollar, Yields, and Gold are higher while Oil is lower.

Markets fell yesterday as the 'good news is bad news' for markets narrative continued. This morning the December jobs report also came in better than expected, yet futures spiked on the data. Who knows if this will hold or it is just a head fake. One of these strong data pieces will be met with buyers, and maybe that will be the bottom(even if just short-term). Yesterdays sell-off pushed the S&P down .80% for the week. The SPY closed under that $380 handle after battling to hold it for most of the session yesterday. Would want to see that broken and held today, if not, fear a move sub $370 is coming soon:

NFLX continues to show relative strength, trading higher for the 5th session in a row, albeit well off its highs. The stock tested $314 at 11am before giving most of it back. Still hold a few freebie calls and may actually look to add some strikes into next week as I think the stock will rally past $330 before their earnings on the 19th:

ISRG was trading at the highs of the day at 3:30pm yesterday, only to give it all back and close in the red. Will need a big rally today for my lotto calls. Still think it will trade past $280 in the coming days and likely into the $300s before they report on the 24th. May look for some more strikes today to play for that move:

Still holding my freebie SQ calls and think it trades north of $70 in the coming days. It closed above its 50dma for the 3rd straight session, a good sign. They should be announcing their earnings date any day now so will be looking for some possible Feb strikes today to play for some premium build into their report, which will likely be in the first week of Feb:

VKTX struggled for the 3rd day in a row, although it held the $8 handle. If it holds $8 this morning, will look to add some later dated strikes:

I was eyeing ULTA calls all morning and almost added some weekly $500 calls as it was nearing $490. The premiums were high so I passed. This morning the stock received a downgrade... I may revisit again today for a bounce. Think ULTA trades above $500 in the coming days:

Still eyeing MASI, UDMY, and AXSM as well.

And lastly, TNDM tested the $47s again before finding some sellers. Still think a gap fill is coming into the low $50s and then likely beyond:

Here are the analyst changes of note for today:

Ulta Beauty downgraded to Underweight from Equal Weight at Wells Fargo
Wells Fargo analyst Ike Boruchow downgraded Ulta Beauty to Underweight from Equal Weight with a price target of $400, down from $450. The space is coming off its worst year since the global financial crisis as demand broke down, inventory ballooned, and costs spiked, and Boruchow sees a very challenging catalyst path heading into 2023, the analyst tells investors in a research note. Additionally, holiday results were likely "OK" at best, and with a difficult Q1 setup looming, Street numbers that will likely be coming down on weaker initial guidance, the analyst contends.
Constellation Brands price target lowered to $267 from $281 at UBS
UBS analyst Peter Grom lowered the firm's price target on Constellation Brands to $267 from $281 and keeps a Buy rating on the shares. Despite expectations that seemed prudent, Constellation missed on EPS, posted a weaker beer depletion result, and updated guidance that was below expectations, Grom tells investors in a research note. The analyst continues to believe that the risk/reward screens favorably and thinks the weakness offers a very compelling buying opportunity.
Western Digital upgraded to Hold at Benchmark after Kioxia merger talks report
Benchmark analyst Mark Miller upgraded Western Digital to Hold from Sell with no price target following reports of merger talks with Kioxia. The generic bull case for Western Digital is built upon the belief that a strong cyclical recovery will follow one of the most severe downturns in years, but there are several factors the bulls need to consider that may delay or limit the extent of the rebound, Miller cautioned. The significant decline in Western Digital's cash position could limit its ability to compete in the next up cycle against its primary NAND competitors, who have announced major new fabs, the analyst argues
Snowflake initated with an Overweight, $170 price target at Wells Fargo
Wells Fargo analyst Michael Turrin initiated coverage of Snowflake with an Overweight rating and $170 price target. While shares are down nearly 60% TTM as concerns around headwinds to cloud consumption models have surfaced, the firm's work suggests Snowflake is built to better weather this storm given the company's mission-critical technology, strong expansion dynamics inherent to this model and impressively well-balanced financial profile, Turrin tells investors in a research note

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

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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