The price action has become quite interesting. The headline continues to be bad on inflation, geopolitics, and rate hikes. But the market is doing an interesting churn and new winners are emerging. Thankfully, the relentless focus has helped and our trading stocks are doing well especially inflation and the end of pandemic trade. Let us review price action case studies to observe and evaluate new opportunities especially in large-cap space.
Case Study of Earnings Risk ~ Roblox RBLX
RBLX is a Video gaming platform that delivers a metaverse experience to its nearly 50 million daily active users, mostly children. It’s a new exciting company that makes money by selling its digital currency Robux to users. The Users then pay for digital goods and services with Robux. No matter where you read, you will always find bullish growth projections. But here’s the problem – the company is not making money and trading at 25 times sales. There is just no room for disappointment. So when the company came out with earnings less than estimates, there is a free fall in the stock.
It’s never a good idea to be invested in a downtrend stock that has earnings event risk.
Barrick Gold GOLD: Earnings Surprise with a macro tailwind
I recommended Barrick Gold, a Gold mining company just a few days back as it made a large candle move due to inflation + geopolitical conflict. Today the company came out with a strong earnings report and a $1 billion buyback plan. No wonder the stock is flying higher.
The market hates Growth stocks now. No wonder SHOPIFY is getting dumped
People wonder how low is low enough without realizing that there is no point fighting with the market. Growth is decelerating and the market does not like it.
There is always a Bull market somewhere and it is in HOME AWAY stocks
The pandemic is over and people are traveling which means big business growth for Hotels, Airlines, Travel Tech companies. AWAY ETF which I recommended yesterday is up 1.23% today despite the bearish market environment. Every day new stocks are breaking out. Take HST as an example
My top 2 picks in the space: 1. Las Vegas Sands LVS and 2. Expedia EXPE
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
Leave a Reply
You must be logged in to post a comment.