Here’s what happening today
- Chinese Education stocks are in free fall for quite some time and the panic has only intensified. Today, stocks like EDU is down 29.35%, TAL is down 20.5%.
- Most of the Chinese stocks are being sold off today with FXI, the Chinese ETF down 5%. Alibaba is down 7% today and trading below 192.
- It’s not pure Chinese stocks, even American stocks having significant operations in China seem to be suffering. Las Vegas Sands LVS stock continues to decline
- Delta variant is leading to chaotic moves in stocks like AMC, Carnival, and American Airlines type stock. There is no trending move in the stock.
- Pacific Gas Electric PG&E has broken down below 9.5 and the stock should be avoided. The company plans to invest billions of dollars over several years to bury 10,000 miles of power lines in order to reduce wildfire risks in Northern California.
- Nokia continues to hold the gap and remains investment-worthy. I covered the stock as a buy-on dip stock near 5.6. One can hope for good things but Nokia and Ericcson stock has long disappointed. Just see how Ericsson has done.
- Twitter is down 5% today. It seems the earning euphoria has dissipated and now $73 is strong resistance to encounter
- The market seems to be once again gravitating towards resource stocks like FCX, CLF, and US Steel but again these stocks continue to lack a clear trend.
- AON stock is up 9.6% on the news that it has terminated the agreement to buy Willis Towers Watson. Warren Buffet has invested in Aon only last quarter and with this overhang gone, there is hope that the stock will do well. [Wills towner stock is down 8%]
- Oil stocks are bouncing back but again most of the stocks are all over the place with no clear trend.
- Intel narrowly avoided stop loss by not slipping below 52. Today’s 2% bounce is encouraging development for long term bulls.
Opportunity: Should one buy Coinbase?
Bitcoin has made a big comeback on big-name endorsement from the likes of Elon Musk, Jack Dorsey, and rumor that even Amazon will accept Bitcoin payment. Amazon news looks like a rumor but this news is helping lots of Bitcoin-related stocks. The stock that’s my fav in the space: Silvergate SI and now it looks like the interest might be returning back in Coinbase which benefits just by Bitcoin adoption. As more people trade Bitcoin, it will help a company like Coinbase.
I am taking it slow and hence avoiding the stock for now. Looking back, it looks like 230 was a great place to buy the stock.
The Breakout Investment Buy ~ Hasbro
I will buy Hasbro HAS as a medium-term investment buy considering the stock has broken out to a new high on strong earnings report.
Hasbro, the maker of popular brands including Play-Doh, Nerf, Power Rangers, and Monopoly came out with a strong revenue and profit numbers (EPS of $1.05). But the biggest reason the market seems to be excited is due to growth in Entertainment revenue, which came via eOne acquisition. The business seems to be moving in the right direction and hence the stock prices should follow. This stock is not for momentum investors but a great pick for Buy and ride investor willing to hold it for 6-9 months.
Trading momentum ~ Snap
Snap stock broke out to a new high on strong earnings announcement. Today the stock has not broken down and seems to be holding the gap. Should one buy the stock in hope that the momentum will continue. The price action says YES.
Snap is now a $100 billion company and many of you would say how much it can rally but history tells us when the stock has strong earnings drive price momentum behind it, sky is the limit. It is not a bad buy today with a stop loss below 70.
Chart Source: finviz.com
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.
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