Price Action Case Studies

Here are Price Action Case studies for today

Should I buy SoFi Technologies SOFI?

The stock is up 13% and it’s drawing everyone’s attention. 

It seems lots of analysts have turned bullish on the stock and over the last 9 months, the stock has always found support at $14 and with today’s move, the stock seems to be taking off and can rally back to $24-$28. In a normal market environment, this stock would have been a no-brainer buy but in the current market, I will give the stock a pass as there is no story except analysts’ bullishness which does not count for much in the current market environment.

Buy Low does not work if the stock has come down due to selling pressure

AT&T stock is sinking to a new low today. The juicy dividend yield of 7% is not working in favor. There is a reason I am scared to recommend stocks near lows.

As you can see in the chart above, AT&T stock saw a big gap down selling on the company selling is media business and since then it has been downhill. It first took support at $28 which it broke and then it continues to slide. Lots of times, the selling pressure is driven by the sector. It’s so unfortunate Verizon also has broken down despite the juicy dividend yield. I did recommend Verizon thinking like a value investor 🙁

Verizon stock can sink to $48. These are stable companies and hence price damage beyond that looks unlikely.

The Bullish Case for Solar Energy ETF: Higher Energy prices mean accelerated Solar energy adoption

Solar Energy ETF TAN is up 4.5% today and it seems like lots of traders are positioning themselves for this trade. The stocks like SolarEdge Tech, Enphase Energy, and First Solar are moving higher. TAN looks like a good ETF to bet on in the current market environment

There is a very strong bullish case that can be made for Alternative energy stocks like Hydrogen Economy stocks

High oil and gas prices freaking everyone out. All the 3 hydrogen fuel stocks Plug Energy, Bloom Energy, and Fuel Cell are soaring. All 3 of them look good and one can play any one of them. Recently Bloom Energy BE for an upgrade with $33 as price target i.e. like a 50$ upside.

 

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