Stock Market Watchlist 24 Nov 2020

From the Stock Market Almanac “Trading The Thanksgiving Market”

For 35 years, the “holiday spirit” gave the Wednesday before Thanksgiving and the Friday after a great track record, except for two occasions. Since 1988, Wednesday-Friday gained 18 of 31 times, with a total Dow point gain of 601.32 versus Monday’s total Dow point loss of 546.19, down 14 of 21 since 1998. The best strategy appears to be coming into the week long and exiting into strength Friday.

These are the notes I shared on yesterday’s watchlist and seems to be ringing true so far this week. We’ve got a strong push up on most sectors. Weed sector is popping on Trump conceding, as Biden/Harris is seen as bullish for that sector. My personal view is they are trading vehicles only and not necessarily “investable” yet until proven otherwise.

This watchlist will be shorter than normal as we have a shortened week, and I feel the market may have a little more juice in it to push higher but not really looking to chase anything, so more thoughts than anything else below.

EV (Electric Vehicle sector) has been the shining star theme for the last few weeks. Names like NIO, TSLA, WKHS, XPEV, LI have been soaring. I covered TSLA’s latest catalyst (adding into S&P 500) in the previous watchlists and it’s been pushing to new highs since, and making us nice bank.

Retailers + Airlines (BA) have been strong also – those names have been beaten up badly since Corona’s economy shutdown and are getting bought up as a rotation trade. Rotation is simply when investors shift their asset allocation into different sectors. Currently we have been seeing names like AAPL, FB, AMZN are lagging. They haven’t been getting any love from the market as EV plays and value stocks have been investors and traders area of focus. I suspect we start seeing some rotation into tech names soon, just can’t predict when of course. We simply keep these on our watchlist and monitor for momentum.

TSLA – (long swing) – we have been long TSLA and as of this writing, still long on TSLA, as there has been no reason to sell. Yesterday we covered TSLA’s levels to watch, and it stalled out at 525 area yesterday after a big move overnight. As of this writing, 8:48Am TSLA is gapping up again with bids over $544. My plan is to take profit on my overnight swing at the open and monitor the movement today.

Key levels to watch and set alerts:

If long you want to keep an eye on these levels below (as of pre-market we’re above these currently) $538.75, $526 , then yesterdays close $521.85, below that $515 and $501.79 (Monday’s low of day) – however, don’t really think we get back down there this week, but anything is possible so we set alerts and monitor price action.

Premarket high as of this writing is $548.60 which would be the next level to break above for continued upside. After that level I’m seeing $559 level as next level above. There’s no real resistance here because it’s above all time highs. Breaking that opens up $575 and $600 levels. The measured move from the previous TSLA Split run in August is approximately $200, so if we line that up with the lows from where this current price wave started, it leads us to the big $600 level, where I would suspect some price consolidation and for it to cool off.

SQ – (long swing) we have been playing SQ last week and yesterday successfully. Full disclosure: I am currently long SQ $205 Call expiring 12/18. notes from yesterdays watchlist: SQ benefits from the Bitcoin boom as they have the option for CashApp customers to purchase BTC and other crypto’s directly.

Key levels to watch and set alerts on:

Yesterdays high of day $209.36 – (ATH – all time high) – above this I’m looking at a push on $210-$212 to take some profits and see how it reacts. However, SQ on the 4hour chart is a bit overbought on RSI (relative strength indicator) so a pullback wouldn’t be surprising. I could see SQ at $220 within a few weeks long as momentum holds up.

BA – name to watch for continued push, it’s up pre-market and could see this pushing. $220, and $223.02 is the most recent high put in on 11/18. Overall, I wouldn’t be surprised to see BA at $240-$250 range in the near future (possible 1-3 weeks?) as momentum in this name continues with positive 737 max news.

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