July 18th, 2022 Watch List

Futures are pointing to a green start to the week, with the S&P set to open 1% higher as I write this. Asia stocks rallied overnight while Europe indexes are also in the green this morning. The US dollar is lower while Yields, Oil, and Gold are all higher.

And this is what UPB is readings this morning: https://www.optionmillionaires.com/morning-reads-62/

Stocks soared on Friday, with the S&P ending the day up 1.9%, putting an end to a 5 session losing streak. This week we see a pickup in the Q2 earnings season with names like NFLX, TSLA, ISRG, IBM, and SNAP reporting. Here are some implies moves:

IBM reports after the close today. The last of my freebie July strikes expired. May look to add some speculative calls today for a possible move to $155 or so post earnings as I think the IBM turnaround story starts to pickup steam:

NFLX will be the one of the most important reports this earnings season with the stock getting absolutely demolished after their last two quarters, completely missing estimates and showing declining subscriber growth. Not going to try and catch a falling knife but do think there will be some tradeable opportunities this week. The stock could move up even on a sub addition miss:

I added ISRG calls ahead of their earnings due out Thursday after the close. I am following last quarters blueprint where I was able to enter some calls before earnings and close some out before the report for some profits. As I mentioned on Friday's watchlist, think UNH's earnings show that there is no recession in healthcare, and even if there is one coming, healthcare will not be impacted as much as other sectors. Think a move to $220 comes before Thursday and will look to close some out to cover costs and ride the rest:

Also will still be watching CI, which could rally over $290 in the coming days on the heels of the UNH beat and raise:

INMD closed in the green on Friday and looks set to break back into the $28s and higher today. Still love this for a move over $30 in the coming weeks and will continue to hold my Aug strikes:

Lastly, I added one U calls Friday. Only a matter of time before the stock reverses its post-acquisition move and trades back over $40(and higher):

The biggest catalyst outside of earnings this week will be the ECB, which is set to raise rates for the first time in over a decade. Then next week we get the Fed. Not going to sit here and say the bottom is in. But as I have been saying for the past few months, prefer to play some upside calls for bounces. Bodes well if we can get a close over $390 on SPY and set things up for another $400 test:

Here are the analyst changes of note for today:

Deutsche downgrades GM to Hold on growing earnings risk
Deutsche Bank analyst Emmanuel Rosner downgraded General Motors to Hold from Buy with a price target of $36, down from $57. Automakers will describe favorable conditions in Q2 but face growing earnings risk, Rosner tells investors in a research note. The analyst says traditional automakers could struggle to regain investor interest amid concerns about consumer, risks to pricing, and questions about near-term profitability impact from electrification
Nikola price target lowered to $7 from $11 at Deutsche Bank
Deutsche Bank analyst Emmanuel Rosner lowered the firm's price target on Nikola to $7 from $11 and keeps a Hold rating on the shares. The analyst expects U.S. auto suppliers to report "soft" Q2 results but generally maintain their outlooks calling for solid improvement in the second half of the year. Automakers will still describe favorable conditions but face growing earnings risk, Rosner tells investors in a research note. With Q2 "likely to represent trough earnings for suppliers," the upcoming reporting season "could serve as a helpful reset of expectations," and a potential catalyst for investors to increase long positions ahead of material earnings recovery over the next 18 months from volume improvement, reduced volatility and improved costs, says the analyst

Teladoc expectations may need to be moderated further, says Jefferies
Jefferies analyst Glen Santangelo said his analysis suggests that industry growth across a couple of key virtual care categories may be normalizing faster than expected and he highlights that consensus is expecting about 20% revenue growth in FY22 and FY23 for Teladoc. While he appreciates that management's updated commentary on the Q1 call has "done a lot to lower expectations" ahead of the company's Q2 report, Santangelo believes expectations may need to be moderated further as Teladoc looks to reset expectations in a post-pandemic environment. Santangelo keeps a Hold rating and $38 price target on Teladoc shares
Align Technology price target lowered to $380 from $410 at UBS
UBS analyst Kevin Caliendo lowered the firm's price target on Align Technology to $380 from $410 but keeps a Buy rating on the shares. The analyst expects the company's Q2 revenue to miss slightly due to lower than expected total cases of 618K falling 7% y/y and China revenue falling 53% y/y. Beyond the near term however, Caliendo sees Align leveraging its new sales reps in new markets such as Northern Africa, also stating that its new doc adds should begin to accelerate.
Medtronic price target lowered to $105 from $125 at Stifel
Stifel analyst Rick Wise lowered the firm's price target on Medtronic to $105 from $125 and keeps a Buy rating on the shares. Many of his targets had been based on multiples assigned well-before multiple economic and geopolitical headwinds pushed both market- and industry-wide share prices lower and he is adjusting his MedTech trading multiples ahead of Q2 earnings season, though Wise notes that his target changes "do not represent any fundamental shift in our positive long-term thinking for the MedTech industry or the potential for broad-based growth reacceleration.
Citi price target raised to $52 from $48 at UBS
UBS analyst Erika Najarian raised the firm's price target on Citi to $52 from $48 and keeps a Neutral rating on the shares. The analyst cites the company's "solid revenue beat" for Q2, stating that the reaction in the stock price also reflects its "distressed valuation". The much-needed 50bp improvement in CET1 this quarter also demonstrates that the new Citi leadership team "could execute", Najarian tells investors in a research note

And here is what I am watching: NFLX, ISRG, IBM, U, TWLO, SPOT, CUTR, CI, GLD, DUST, GLL, JDST, REGN, SAGE, and IBB.

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.

More Posts by JB: View All | Private Twitter Feed: Access Now! (For Diamond Members)