Stocks closed lower again on Thursday in a choppy session, with the S&P finishing the session off .58%. Asia markets rallied overnight on positive news out of the PBOC and Europe stocks are rallying in sympathy. U.S. future are pointing to a higher open, the Dollar and Yields are lower while Oil and Gold are higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-27/
It was a choppy session for markets yesterday coming off their worst performance in years on Wednesday. The SPY chopped between gains and losses for most of the day, hit highs at 3pm, only to reverse course and close in the red. The DOW is down 2.8% for the week and, pending a monster rally today, will make it 8 losing weeks in a row - which hasn't happened since 1923. If there is a silver lining, it is that the S&P is not in bear market territory as of yet. The SPY is gapping higher this morning and nearing the 3pm highs from yesterday. That $394 handle provided resistance a few times so will bode well if that level breaks and holds today into the weekend:
Melvin Capital from GME lore, announced he was winding down his fund in the face of huge losses. You could see a direct correlation between the names he was in and selling pressure. EXPE was one of those names that caught my eye. Despite strong earnings and tailwinds from what will be a very busy summer travel season, the stock has been absolutely pummeled. Once it showed a bid at the open I went and added some $130 weekly calls for a potential reversal. I was able to close most for over 100% and held a few into today. Think EXPE can head into the $130s and maybe even $140s in the coming days so may look to add some strikes into next week and look to close the last of my weekly calls today. If it holds $128 will look for $132 or so. And just an FYI, the chart has a nasty pincher which usually precedes a large reversal:
ULTA churned in the $350s yesterday so I held the last of my speculative puts as a hedge coming into today. They closed pretty much flat from entry so will likely just hold these again today as a hedge and salvage if ULTA breaks $360:
Another rough session for IBM yesterday, breaking into the $120s. Still think this name heads higher in the coming weeks, but won't add any more strikes as of yet. The stock closed under its 50dma for the first time since April, so would want to see a move back above it and have it hold for a session or two:
YOU had another disgusting session closing down over 2% on the heels of its 14% drop on Wednesday. June $40 calls look interesting here but will wait for a move back over $30:
Will be watching U, RBLX, CMG, WING, ROKU, and PLCE as potential lotto trades today.
Here are the analyst changes of note for today:
| Palo Alto Networks price target lowered to $580 from $660 at Wedbush |
| Wedbush analyst Daniel Ives lowered the firm's price target on Palo Alto Networks to $580 from $660 and keeps an Outperform rating on the shares. Palo Alto Networks beat across the board for the April quarter and increased its guidance as it appears the company's cloud-driven strategy is resonating increasingly well with cybersecurity customers in the field, Ives tells investors in a research note. The shift to cloud is a massive tailwind for Palo Alto as the company is in the right spot at the right time to benefit from this multiyear tidal wave of cybersecurity enterprise spending, Ives contends |
| Pet specialty retail selloff overdone, says Jefferies |
| Jefferies analyst Stephanie Wissink lowered the firm's price target on Petco (WOOF) to $19 from $21 due to multiple compression across retail and keeps a Hold rating on the shares ahead of the company's earnings report on May 24. However, Wissink believes the pet specialty selloff has been overdone as demand in the "recession-resistant" pet category remains healthy and she sees minimal risk to pet retailers from category rotation. In the space, she favors Chewy's (CHWY) consumables-driven subscription model and she keeps a Buy rating and $60 price target on Chewy shares ahead of its report due on June 1 |
| Canada Goose price target lowered to C$38 from C$45 at Wells Fargo |
| Wells Fargo analyst Ike Boruchow lowered the firm's price target on Canada Goose to C$38 from C$45 and keeps an Overweight rating on the shares. With telegraphed headwinds in China already known, Canada Goose navigated Q4 generally well, Boruchow tells investors in a research note. The analyst is comfortable with the trajectory of the FY, considering that Q1 is just 5% of the full year's business, and that Canada Goose is relatively insulated from industry-wide supply chain pressures with its largely Canadian manufacturing base. |
Bath & Body Works price target lowered to $60 from $82 at Cowen |
| Cowen analyst Jonna Kim lowered the firm's price target on Bath & Body Works to $60 from $82 and keeps an Outperform rating on the shares. The analyst continues to believe in its long-term growth potential; however they now expect incremental pressure from rising costs |
Deckers Brands price target raised to $407 from $358 at Cowen |
| Cowen analyst John Kernan raised the firm's price target on Deckers Brands to $407 from $358 and keeps an Outperform rating on the shares. The analyst said the stock has some of the best risk/reward in the entire Softlines space as management's execution is far in excess of peers in the sector and guidance could prove conservative |
| Amazon.com removed from Focus List at Citi |
| Citi analyst Ronald Josey removed Amazon.com from the firm's Focus List citing macro uncertainty and a lack of near-term catalysts. However, with the shares down 26% since earnings, much of the risk is priced in, particularly for longer-term investors, Josey tells investors in a research note. The analyst believes Amazon can gain greater share of retail sales in a more challenged macro environment, particularly as it prepares for Prime Day in July and as comps get materially easier in the second half of 2022. He keeps a Buy rating on the shares with a $4,100 price target |
And here is what I am watching today: YOU, EXPE, U, RBLX, CMG, WING, ROKU, and PLCE.
Let's have a great day!
-JB