Swing Trade Idea – January 3, 2022
Market Setup
- Global markets are mixed with USA green, Europe green, Japan green, Hong Kong red, China green, Asia green
- Yield curve steeper with long yields higher, usually positive for financials and reflation stocks
- US dollar higher usually not positive for commodities. S&P has been correlated with the US dollar recently
- News: Markets closed in UK, Japan, Canada and China so larger moves are possible; European PMI strong, positive for European equities; USA: mfg PMI 945ET, construction spending 10ET; China: Evergrande ordered to tear down apartment blocks and shares suspended; Covid: 10M positive cases last 7d and some concerned on an economic impact due to absences and govt reaction
- Stocks: TSLA Q4 deliveries exceeded WS forecasts. All EV/auto shares trading higher. Tax loss selling names are getting a broad bid
- Indices: USA indices are positive led by small caps and Nasdaq. Breadth is strong, which can lead to larger moves, especially with many major markets closed. SPX4800 is a major gamma level which can act as resistance and lead to larger moves above. 4750 is a key support level. Indices pulling back from overbought in the premarket potentially setting up for a pop on the open so watch for a reaction to premarket highs
- Sectors: Leading: Bitcoin, spec tech, lithium, oil explorers, small caps Lagging: gold long bonds
- Stocks to watch: TSLA(STLA LI) TSM CCJ PYPL Spec Names: LOGI HTZ HIMX MARA BIRD
- Indices: /btc XLY ARKK LIT XOP ICLN IWM SMH TAN SOXX ARKQ XLE QQQ EWZ SPY GLD TLT /6e SLV
- S&P500: TSLA PYPL GM NVDA CCL F WFC CHRW GPS BA AMD LVS KLAC AMD OXY KIM MMC ROST RJF
- Movers: TSLA WOLF IIVI TTE ODP LI XPEV NIO HIMX HOOD AMC
- WSB: TSLA CCJ GOEV RIOT HUT SKLZ MVIS NIO TLRY PLUG HOOD
Trade Idea TSLA
TSLA reported Q4 deliveries that exceeded Wall Street estimates which leads to a Pavlovian buying response. Very extended in the premarket but has broken above a down trend line. One can look for a pullback for a long. 1105 is the bottom of the gap and 1100 is important support which needs to hold. 1200 is a logical target. All of the automakers are strong and one can look at XPEV, LI, STLA as alternates.
