Markets found a bit of footing on Thursday but still closed lower on the heels of Wednesday's bloodbath, with the S&P dropping .10%. Asia stocks closed mostly higher overnight while Europe indexes are mixed this morning. U.S. futures are pointing to a small bounce, the Dollar is lower, while Yields, Oil, and Gold are all higher.
And this is what UPB is reading this morning: Friday Morning Reads
It was an interesting session for stocks yesterday. After the carnage in the tech space this week, highlighted by Wednesdays sell-off, I would have thought if the market held-up we would get a large bounce in the beaten up names. Instead names like ZS, MDB, NET, and others languished for most of the session and indexes all closed the day in the red. Take a look at their 2022 performance so far:
Welcome to 2022:$NET -20.88%$MDB -18.83%$TEAM -17.71%$ZS -19.02% pic.twitter.com/uvfH91owgu
— Option Millionaires (@OMillionaires) January 7, 2022
Bulls on those names should be salivating, instead it was a whimper yesterday. Not saying they are going to drop another 20% in the coming days, just think there maybe more selling before they get some sustained bounces.
With that premise I was looking at some other names that may start to find pressure if the market fails to find footing, and have options that may not be pricing in a large move. AVGO, ZBRA, and PANW are names that come to mind. PANW rallied out of the gate yesterday on multiple upgrades so I steered my eyes to AVGO. The stock struggled to hold $640 and figured if sellers come in a pull to $600 and possibly below could be in the cards, so I added some lotto puts. The stock remained rangebound for most of the day until pulling to lows right near the close. Will need a large move today for my puts to come back to life. I may look to add some speculative puts on the name into next week if it breaks $630:
ZBRA is a name that has held up quite well despite the underlying market carnage. A great story but sellers could come in none-the-less with a possible move to $500 in the coming weeks. May look at some speculative puts for that possible move:
Long View:
Short View:
DOGZ was absolutely destroyed yesterday on no news or catalyst. I had mentioned on yesterdays watch list that I was worried for a pull and may sell my calls, but by the time I tried to lock my position when the stock tested $8, it tumbled in a few seconds time to the mid-$7s and my calls were .15 x .20. Wasn't planning to sell for 50% so held the rest only to watch the selling continue for the rest of the day. Will be taking this name off my watchlist and will be counting the days till the calls expire...
NY gambling is coming tomorrow with DKNG being one of the first platforms to be accepted. It is gapping a bit in the pre-market. If stocks find bids today that will be one I look to add some calls on:
Earnings season kicks off next Friday with the Banks. Can't wait.
And lastly, My top 5 stock Webinar Should be out this weekend. The instant it is out I will post it for those that have messaged me. Thanks so much for your patience and my apologies for the delay.
Here are the analyst changes of note for today:
| TransDigm upgraded to Buy from Hold at Truist | |
| Truist analyst Michael Ciarmoli upgraded TransDigm to Buy from Hold with a price target of $786, up from $600, as part of a broader report on select Aerospace and Defense names. TransDigm is one of the best value creators in the industrial complex and stands to benefit from progressively increasing commercial aerospace aftermarket parts demand in the coming periods, the analyst tells investors in a research note. Ciarmoli adds that the combination of volume increases and price increases should enable the company to continue to drive its EBITDA margin expansion | |
| SM Energy price target lowered to $47 from $49 at JPMorgan | |
| JPMorgan analyst Arun Jayaram lowered the firm's price target on SM Energy to $47 from $49 and keeps an Overweight rating on the shares. The analyst expects another solid operational quarter for SM, with October state data indicating continued strong well performance for the company. However, he believes inflation will push the company's 2022 capex higher | |
| Crowdstrike weakness creates compelling entry point, says Canaccord | |
| Canaccord analyst T. Michael Walkley said given the recent pullback in the stock, he thinks the re-rating creates a more favorable entry point for longer-term-oriented investors looking for a foundational security name. He hosted investor meetings with CrowdStrike management and came away with increasing confidence in the company's ability to win given its defensible technology moat and accelerating platform uptake. Walkley reiterated his Buy rating and $330 price target on CrowdStrike shares | |
| Alibaba price target lowered to $180 from $210 at JPMorgan | |
| JPMorgan analyst Alex Yao lowered the firm's price target on Alibaba to $180 from $210 and keeps an Overweight rating on the shares. The analyst is "turning more cautious" on China's online consumption outlook and cut Alibaba's December quarter customer management revenue growth assumption to negative 2% year-over-year from positive 5%. Yao forecasts the negative CMR growth will end in the June 2022 quarter, "admittedly with low visibility." On the other hand, the analyst expects a further sequential step-up in strategic investment in China commerce in the December quarter followed by a gradual loss narrowing starting from March quarter. Yao believes earnings revisions will be the most important share price driver of Alibaba in the next few quarters, besides policy stimulus. The analyst thinks the stock will continue to be under pressure in the near future, "despite low valuations | |
| Constellation Brands price target raised to $290 from $272 at Argus | |
| Argus analyst John Staszak raised the firm's price target on Constellation Brands to $290 from $272 and keeps a Buy rating on the shares. The company should emerge from the pandemic in a position of strength as beer shipments remain solid and as it moves past the headwinds created by the sale of certain products to Gallo, the analyst tells investors in a research note. Staszak adds that Constellation has done a good job of keeping popular brands like Corona and Modelo in stock during the pandemic and should continue to gain market share as consumers purchase alcoholic beverages for home consumption and as restaurants reopen | |
And here is what I am watching today: ZBRA, AVGO, PANW, DKNG, MDB, NOW, ZS , SPOT, MED, TREE, TWLO, CTXS, OPRK, RDFN, Z, EXAS, CDLX, and DXCM
Let's have a Great day!
-JB