Navigating Opportunities in Anxious Market

Here are the market observations for today:

1. The most difficult market environment is when price action on a day-2-day basis sends you conflicting messages while the big picture remains clear.
2. There are plenty of things to be concerned about, and the bears have a compelling case but what matters is the big picture price action which continues to be bullish
3. Bulls have two strong data points in their favor: 1. Corporate earnings; and 2. Strong Consumer spending data. 
4. Corporate Earnings conference call – Inflationary pressures are there but the demand environment is strong and companies have the pricing power to maintain margins
5. Large Cap financials are under pressure on inflation concerns and the damage it can cause to economic growth.
6. When inflation is a worry, then retailers like TJ Maxx, Ross and Burlington do well. Today TJ Maxx has come with a brilliant set of numbers. Will I buy the stock? Nope
7. Always remember, any stock can go out of favor quite quickly. Have a look at Visa
8. What happened? – Amazon will not accept UK-issued Visa credit cards from next year. Why? – Amazon says that Visa charges high fees to process transactions, with no additional value to its service.
9. Earnings Gap leads to run-away move. ROBLOX RBLX just demonstrating that. Here’s how
10. Picture perfect chart: COCO
11. Sometimes patience matters if the chart has not broken down. The case with PUBM One can think of adding PUBM today if you don’t have it.
12. One sector that can surprise: Solar. We have Solar stock ETF TAN, Enphase Energy, and Array ARRY in the momentum portfolio below.
13. Bitcoin-related stocks are under pressure right now. Sometimes, all you can do is follow the chart without making any conclusive calls.
14. Covid cases are resurging in the rest of the world and so covid vaccine makers making a comeback. Today, NVAX is up 10% on news that its vaccine is approved in the Philippines.
15. For the newbie trader, a single trading loss is often a tragedy. For the pro trader, a single trading loss is merely a data point.

Trade Sheet:

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