Ultra Large Cap trades: Hits and Misses Part II

Here’s what you will find in this blog: Price action concepts, opportunities, and Price Action stories in Ultra Large Cap (stocks that have market cap > $50 billion)

• What is AMD doing right now?
• Wells Fargo +25% trade
• General Motors – Breakout story
• AMAT ~ Breakout that resulted in 100% gains
• CVS – Why it matters to follow the price action

The AMD Story ~ Long term Base Building

Fundamentally speaking, there is every reason to be bullish on AMD as its chips become more and more useful across industries. AMD saw a huge spike in demand for its Ryzen PC processors last year. 

AMD has been in a secular bull market for quite some time now and the stock is building a base at $75 and one can hope that the stock will surprise big time over the next 12-18 months. The stock is an excellent buy between 75-78 zone.

Wells Fargo ~ Large Candle Push

When a blue-chip stock gets a fundamental news flow trigger and that results in a large candle move, then one should expect strong follow-through gains of 20-25%. Wells Fargo stock did exactly that, this is another stock I covered back in Feb when it made a large candle move. It was a buy stock at 36.5 with a 25% upside. [Profit target: 45.5]

The stock is very close to the profit target of 45+. I will book profit above 45.

General Motors – Large Candle Breakout

When a stock makes all the right moves fundamentally, and the price action is supportive then the stock has the potential to surprise on the upside. General Motors is positioning for an EV future. I have been bullish on the stock since its price was at $30 and then made a more aggressive recommendation when it broke past 40.

General Motors stock is in a long-term bull market and it’s in the process of building a base at $50 before it can surge even higher. This is a long-term hold and one can look to add more at $50.

Applied Materials AMAT

If you are bullish on Semiconductor, then you should be bullish on AMAT. AMAT breakout above 70, has now resulted in a 100% move.

Now the stock should build a base before moving higher. This is a stock to keep an eye on for the next set of opportunities which might come few months down the road.

CVS – The resistance matters

No matter how bullish you feel about a company’s fundamentals, the price action matters. I covered CVS in Jan and warned against going long because it traded below the line of resistance. Now 4 months have passed and CVS stock continues to trade below resistance

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers