There is a difference between Hope and Optimism. Hope has no basis, Optimism has. The price on the screen is screaming that the market has some Bullish Momentum now but everyone is worried. There is a view this might not last long. This can be just one big rally for more sell off or this could be the market climbing wall of worry. Nobody knows what lies ahead but for now, play long in stocks exhibiting clear strength. The sentiment is so bad that the market can surprise everyone by sustaining the upmove. Here are the stocks I am watching and the trade setups
Earnings Momentum in Ford driving the stock higher
Ford stock reported strong earnings and the stock is moving higher. The company’s revenue surpassed expectations along with the margins. The supply issues seem to be behind the company. That’s not all the company maintained its guidance and assured the market to generate free cash flow in the vicinity of $6 billion. Strong earnings + attractive valuation and favorable market conditions can drive this stock much higher. For now, let’s hope it hits $18 sooner than later. I recommended buying at $13.6 and the stock is hold
Will Nokia continue to march upwards?
Nokia did a big Gap up on earnings beat but since then has made a small steady move. One can hold and hope that the stock will rally sooner than later.
Kinder Morgan KMI: Fundamental Long-Term Buy for Dividend Growth
The company is a play on transporting Natural Gas across the US. The company has huge pipeline assets and generates strong cash flows, thanks to long-term contracts. At current market price, it delivers 6% dividend yield and the cash flow is only expected to increase with time. The stock is a buy and hold even at current market price. This is not a trading play.
Earnings Momentum: Will it drive Boston Scientific BSX Higher?
Boston Scientific came out strong earnings report. The stock did a Gap up and now has sustained the Gap which means the stock is ready to move higher. The company reported strong sales growth. Adjusted profit increased 10% to 44 cents a share and beat expectations by two pennies, according to FactSet. The stock has an earnings tailwind but it will be a slow mover.
Climate Deal + Inflation Reduction Act = Buy Solar stocks ETF TAN and FSLR post-earnings momentum
Democrat’s Inflation Reduction Act (IRA), has earmarked $369 billion on energy and climate change initiatives. FSLR gapped up on this news and then it got followed by a strong earnings report. This has set the stock for an explosive upmove. I would buy the stock below $100
If you want to take an investment approach, buy TAN ETF at 83.5. Aggressive traders can look at add NOVA
Fundamental Hold: 1. SWN; and 2. Zoom. I exited Novavax ahead of earnings.
Momentum Hold: 1. Silvergate SI 2. AEHR and 3. WWE. I exited NTLA
What worked?
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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