Wealthpress |
- Moderna Has Been on FIRE. But Is it Still a Buy?
- Stock Market Recap: Friday, Jan. 29, 2021
- Webull vs. Robinhood: Which App Is Better?
- Trade Recap: Is Workhorse a Good Investment?
- ‘Sir, This is a Casino’ — Shorts and What’s Next
| Moderna Has Been on FIRE. But Is it Still a Buy? Posted: 29 Jan 2021 03:30 PM PST Is Moderna still a buy? I've been hearing this question a lot this month. Probably my most popular video I've done since joining the team here at WealthPress was a few weeks ago when I said Moderna could double or triple this year. It seemed bold to some, but we're getting close to doubling already! My first video was posted back on Jan. 5 when Moderna Inc. (Nasdaq: MRNA) was trading under $110. Since that day, I have been bombarded by great questions about this vaccine company. Shares have quickly marched higher, exploding after hours heading into Friday, rising from $159 to as high as $183.86-and-change shortly after the opening bell. The market tanked and the stock still closed above $173 Friday, good for about a 60% bump in 24 days! For some background, Moderna was down about 40% off recent highs in early January. Based on 2021 earnings-per-share estimates from analysts, the stock's valuation just looked way too low. But Is Moderna Still a Buy? WealthPress’ Jeff Yastine So here we are, a few weeks later, and we're sitting 60% higher. So now of course the question I keep getting since shares are back near their all-time highs… is it still a good time to get in? If this past week's activity — amid the GameStop short-squeeze mania — shows us anything, it's that everything in the stock market carries risk. There are periods that seem like there's hardly any risk. But before you know it there's a sharp correction… And sometimes bear markets, which introduce a whole new generation to the fact that sometimes, you can lose money. And that's why investing and speculating tends to be hard. And if it seems easy, that's only because the market makes it seem easy when everything is going up. So the question we'll answer in today's video is whether not Moderna is still a buy. Let us know your thoughts in the comments below. And as always, send your investing questions to jeff@yastine.com. Be sure to subscribe to my new YouTube channel. You can also follow me on Twitter and Facebook. The little guys are leading a charge against Wall Street… And could open up opportunities to strike it rich — even if you aren't an expert! For the first time in trading history, the balance of power has swung in another direction. Retail investors could have just as much potential to move the markets as Wall Street veterans. The Robinhood Effect could forge a new path for everyday traders and I want you to get a slice of the pie, too. That's why I'm revealing exactly how you could make the most of this opportunity… and more. The post Moderna Has Been on FIRE. But Is it Still a Buy? appeared first on Wealthpress.  |
| Stock Market Recap: Friday, Jan. 29, 2021 Posted: 29 Jan 2021 02:28 PM PST Wall Street was hit with another round of selling pressure as the short-squeeze frenzy and volatility added to coronavirus and vaccine woes — and more in Friday's stock market recap. The uncertainty over stimulus also weighed on sentiment with the losses sealing weekly losses for the major indexes. Stock Market RecapThe Dow dropped 1.9% following the afternoon fade to 29,856.  The Nasdaq was also down 2% after tapping a low of 12,985.  The S&P 500 sank 1.9% with the intraday low reaching 3,694.  The Russell 2000 was lower by 1.6% after bottoming at 2,066.  For the week, the Nasdaq fell 3.5%; the S&P 500 and the Dow gave back 3.3%; and the Russell 2000 nosedived 4.6%. For the month, the Dow was down 2%; the S&P 500 declined 1.1%; the Nasdaq was up 1.4%; and the Russell 2000 zoomed 5.4%. Energy and Technology led sector laggards after sinking 3.3% and 2.4%, respectively. There was no sector strength. Stock Market MoversShares of Booz Allen Hamilton Holding Corp. (NYSE: BAH) were down nearly 11% after missing revenue estimates while lowering its 2021 outlook. The company reported a profit of $1.04 a share on revenue of $1.9 billion versus forecasts of 93 cents on revenue of $2 billion. The company raised its fiscal year 2021 earnings view to $3.70-$3.85 from $3.60-$3.75 versus consensus estimates at $4.20. However, they lowered their revenue growth to 4.8%-6% from 7%-9%.  Stock Market OutlookThe percentage of Nasdaq 100 stocks trading above the 50-day moving closed at 56.86%, down 5.88%. Near-term and upper support at 55%-52.5% was breached but held. A move below the latter would indicate a retest towards 50%-47.5% and levels from late October. Resistance is at 57.5%-60%. The percentage of S&P 500 stocks trading above the 200-day moving average settled at 84.95%, down 1.98%. Current and upper support at 85%-82.5% failed to hold. A close below the latter would signal weakness towards 80%-77.5% and slightly overbought levels from early November. Resistance is at 87.50%-90%. Global EconomyFrom the global stock market recap, European markets settled lower. France's CAC 40 dropped 2% and the Stoxx 600 stumbled 1.9%. UK's FTSE 100 gave back 1.8% and Germany’s DAX 30 was off 1.7%. The Belgium20 fell 1.2%. Asian markets were weak. South Korea's Kospi plummeted 3% and Japan's Nikkei tumbled 1.9%. Hong Kong’s Hang Seng sank 0.9% while Australia's S&P/ASX 200 and China’s Shanghai were down 0.6%. U.S. EconomyPersonal income increased 0.6% in December, and spending dropped -0.2%, versus a -1.3% drop in November, with spending declining -0.7%. Compensation rose 0.5% versus 0.4% previously, with wage and salary income also increasing 0.5% from 0.4%. Disposable income bounced 0.6% after the -1.5% pullback in November. The savings rate rose to 13.7% versus 12.9%. Employment cost index rose 0.7% in the fourth quarter following the 0.5% gain in the third quarter. A lot of the strength was in the wage and salary component that increased 0.9% after rising 0.4% previously. Benefit costs were up 0.6%, the same as in Q3. On a 12-month basis, ECI grew at a 2.5% year-over-year pace versus 2.4% previously. Stock Market SentimentThe iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was down for the second straight session following the morning pullback to $151.30. Prior and upper support at $151.50-$151 was breached but held. A close below the latter would signal additional weakness towards $150.50-$150 with the monthly low at $149.93. Lowered resistance is at $152.50-$153.  Volatility IndexThe iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the fourth time in six sessions after zooming to an intraday and fresh monthly high of 37.51. Current and lower resistance at 37-37.50 was breached but held. Support is 32.50-32 followed by 30.50-30.  Stock Market AnalysisThe S&P 400 Mid Cap Index (NYSE: MID) was down for the second straight session after testing a low of 2,333. Fresh and upper support at 2,350-2,325 failed to hold. A close below the latter would indicate further weakness towards 2,300-2,275. Resistance is at 2,375-2,400 followed by 2,425-2,450. RSI (relative strength index) is in a downtrend with upper support at 45-40 failing to hold. A move below the latter would signal additional weakness towards 35-30 and levels from late September. Resistance is at 50.  SectorThe Materials Select Sector SPDR Fund (NYSE: XLB) was down for the sixth time in seven sessions with the intraday low tapping $70.28. Near-term and upper support at $70.50-$70 was breached but held. A close below the latter would indicate a retest towards $69-$68.50 and levels from mid-November. Resistance is at $71.50-$72 and the 50-day moving average. RSI is back in a downtrend with key support at 35 holding. A close below this level would suggest further weakness towards 30-25 and prior lows from last March. Resistance is at 40.  Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap. The post Stock Market Recap: Friday, Jan. 29, 2021 appeared first on Wealthpress.  |
| Webull vs. Robinhood: Which App Is Better? Posted: 29 Jan 2021 02:15 PM PST Once upon a time, Robinhood was hailed for being so open and free, the first of its kind to provide options trading for beginning investors. Now the investment app is restricting the buying of shares on certain stocks and facing the first of many class-action lawsuits from furious investors. With Robinhood slowly digging itself into a grave, and investors eager to find an alternative trading app, the competition of Webull vs. Robinhood has begun. And things aren't looking too good for Robinhood… Webull vs. Robinhood: Robinhood UncoveredTraders, I've discovered another trading platform besides Robinhood, and I have some thoughts… But, I want to save those thoughts for my next video, part two of "Webull vs. Robinhood." Today, I'm focusing on Robinhood. One of the things I used to really love about it was that it has free commissions. I spend tens of thousands of dollars a year on trading commissions, and Robinhood takes care of that like nothing. However I can't ignore Robinhood's infuriating decision to block investors from buying and trading GameStop, AMC, BlackBerry, Bed Bath & Beyond and Nokia on Thursday. So is the trading platform really worth it? And can it win the battle of Webull vs. Robinhood ? Well, if you can ignore the shady business of Robinhood forcibly closing users positions on GME — liquidating at a price they did not consent to — restricted trading on individual retail investors and pending class-action lawsuits, then you're still going to have to deal with how basic the trading platform is. If you're a buy-and-hold investor, that's great. The simplicity of Robinhood might work for you. But here's what I've realized: You can't do any technical analysis on Robinhood. Let's say that I want to look at the chart of the QQQ. I'll get a line chart for the day, the week, one month, three months, one year and five years. But that's about it. I can't add any trendlines, a moving average, RSI or anything that would help me calculate the stock markets direction or when I should enter and exit trades. And that's not the only issue I have with Robinhood… Make sure to watch my video below to watch part one of Webull vs. Robinhood. As always, leave your thoughts in the comments section below and don't forget to subscribe to my YouTube channel to stay up to date with all things options trading. P.S. After watching the battle of Webull vs. Robinhood check out Alpha Trades Head Strategist Adam Sarhan's short video on the real reason why brokers like Robinhood, TD Ameritrade, Charles Schwab and others are restricting or outright banning new trades on GameStop, AMC, BlackBerry, American Airlines, Bed Bath & Beyond, Nokia and others. Did you lose money or miss out on any big wins because of the restrictions? Are you considering changing brokers now? Share your thoughts on the ongoing short squeeze mania with us at wptestimonial@gmail.com, and we could feature your story in an upcoming piece. The post Webull vs. Robinhood: Which App Is Better? appeared first on Wealthpress.  |
| Trade Recap: Is Workhorse a Good Investment? Posted: 29 Jan 2021 01:54 PM PST It's the last day of January, and 2021 has been quite the ride already. Today, I'd like to slow things down a bit and give you guys a recap of a trade in my Monthly Money Flows service and answer the question, "Is Workhorse a good investment?" With all of the GameStop craziness this past week, it would be nice to end the month on a good note. Workhorse could be the chance to do that. This trade popped up on my radar at the beginning of the month following the Georgia Senate runoff. With the Democrats in full control, electric vehicles and clean energy are two of the top sectors to keep your eye on. Companies like Tesla Inc. (Nasdaq: TSLA) have already made a mark. It is one of the biggest clean energy companies in the world. But what about smaller stocks that could see a jump as a result of the political shift? Are stocks like Workhorse a good investment even though they're just getting started? The Factors That Decide if Workhorse Is a Good InvestmentWorkhorse Group Inc. (Nasdaq: WKHS) is an upstart American company that manufactures electric delivery vehicles. In December, Workhorse was in the running for a $6.3 billion contract to provide the U.S. Postal Service with a new fleet of trucks. This would have sent the stock soaring. The USPS, however, has not made a decision and likely won't until the second quarter of this year. That's not a great sign for its shares… But all is not lost now that the Democrats are in power. President Joe Biden has said he plans to replace the entire government fleet of trucks with electric vehicles… And he wants them to be from a U.S.-based company — like Workhorse. So is Workhorse a good investment? Let's take a look at the charts and find out in this trade recap. P.S. If you've ever wanted to know how the "smart money" operates, I've got you covered. I am hosting a special presentation to reveal a little-known market secret that Wall Street consistently profits from. And once you know about it, you'll never trade the same way again. This secret is so powerful, it's allowed my readers to make a wide range of double- and triple-digit winners month after month. But don't just take my word for it. Learn Wall Street's secrets for yourself and sign up to watch my event. The post Trade Recap: Is Workhorse a Good Investment? appeared first on Wealthpress.  |
| ‘Sir, This is a Casino’ — Shorts and What’s Next Posted: 29 Jan 2021 01:16 PM PST There's a good chance you've heard of the website Reddit. It's an online forum where users can join communities based on their interests, like sports, video gaming, gardening… or even investing. And one of these investing communities on Reddit has blown up in a big way:
It's notorious for its "YOLO bets", such as buying out-of-the-money call options days before expiry in the hopes of hitting it big. WallStreetBets was once the haunt of investment industry professionals looking for a place to relax and joke with like-minded people. For a time, even personas like the currently imprisoned former hedge fund manager Martin Shkreli would visit to shoot the breeze. In recent years however, and especially since the COVID-19 pandemic, the forum has taken on a new life of its own as novice investors chasing the thrill of quick gains during the downturn piled on. Now the fastest-growing community on Reddit, these new investors have taken some of the "meme" advice offered by WallStreetBets and acted on it.
Look at this YTD chart…
Was it some explosive news release or company results? Did they get a buyout offer? The answer is much more absurd than you'd think. The Birth of the Meme that Killed a Hedge FundThe beginnings of GME's massive run begin over a year ago in September 2019, when a reddit user named DeepF*******Value decided to post their "YOLO" options play on GME to the community:
DeepF*******Value cited their reasons for making the trade as including "…[t]he fact that it's worth quite a bit more than $8/sh and there are numerous catalysts that could trigger a reversion to fair value over the next 18mo." Reactions from the community were mixed. After all, GME was a brick-and-mortar retail video game storefront (remember those?). Its performance was sagging in the face of increasing competition from digital video game sales. With most of their sales growth coming from their collectibles segment as opposed to their core video game business, some were convinced that GME would soon be going the way of the dinosaurs, much as how video rental stores did before. Over the next year, however, DeepF*******Value would staunchly continue to remain long. Even as the company traded sideways and continued to post monthly updates to the WallStreetBets subreddit.
Even at this point, reactions were still mixed, with many applauding DeepF*******Value commitment but also many telling them to cash out their position. Naked Shorts and The Evolution of Occupy Wall Street…Others wondered just how such gains could be realized from a "meme" stock. Had DeepF*******Value closed their position out at this point, this would've ended as just another footnote in WallStreetBet's history of YOLO options trades. But instead and much like the Bitcoin die hards, they continued to hold. And share prices continued to slowly trend upwards. There was a brief hiccup early last December when shares dropped almost 20% following a bad quarterly performance, but share prices steadily creeped up until hitting $20 on January 11th. On that day, GameStop appointed the founder of online pet supply retailer Chewy.com, Ryan Cohen, plus two other e-commerce veterans to its board to focus on growing its own digital sales segment. This was considered to be a good sign for the stock, as it was trying to evolve its business model in an effort to stay competitive.
And WallStreetBets, now having nearly 2 million subscribers, and also having seen over a year of monthly – and sometimes weekly – updates from this user, was now very familiar with GME:
In fact, there were more short sold shares of GME than there were actual shares of GME. This was caused by a phenomenon known as "naked short selling", where shares that don't actually exist are sold on the market. Usually when short selling, the shares must first be borrowed from someone who owns the stock. When naked short selling happens, firms are selling shares without first ensuring there's stock they can borrow to cover their short positions. While naked short selling is illegal in practice, thanks to loopholes in the rules and poor regulatory oversight, naked short selling still happens in the industry. Here's where history gets made…
Some began speculating that a "short squeeze" would happen. This is where a rapid price runup would occur due to short sellers trying to cover their short positions. Members of WallStreetBets pounced. And the rest is history. GameStop to the MoonJust two days after GME's positive news on the 11th, GME shares began climbing rapidly, first to $30, then to $40, then to $65. But it wouldn't be until early this week when the floodgates burst open, and prices were rapidly driven up by the combination of WallStreetBets hype-fueled buying and funds scrambling to cover their short positions.
What about the short sellers, you ask? The hedge funds who thought that GameStop stock was going to drop instead? Well, on Wednesday the 27th, two of the major short sellers of GME, Melvin Capital and Citron Research, were forced to cover their short positions at massive losses. On the other hand, numerous posts on WallStreetBets abounded telling of novice investors who were able to pay off medical bills, accelerate their savings accounts, or pay down mortgages thanks to their GME positions. In the midst of all this, hedge fund Melvin Capital desperately sought a cash infusion to help cover the losses from their now-underwater short positions. So, in came fellow hedge funds Citadel LLC and Point72 Asset Management, who pledged $2 billion and $750 million, respectively, in exchange for non-controlling revenue shares in the firm. But wait… Citadel? Why does that name sound familiar? Wait a minute… The Dark Side of the MoonSo far, the sentiment in WallStreetBets has been "the little guys sticking it to Wall Street". Certainly, the general vibe seems to feel as if retail investors have "won" a victory over the big hedge funds who have turned the markets into cash cows to milk at their own convenience. However, there's another side to the story here… If you recall from our previous article on Robinhood, the favored discount trading platform of WallStreetBets and novice investors everywhere, Robinhood doesn't actually handle their own order flow. Instead, Robinhood sends their orders to a number of market maker firms who execute the trades on their behalf.
For a quick refresher, this order flow from Robinhood allows Citadel to "front-run" client orders by placing their own trades ahead of Robinhood users. And it also allows them to take the other side of the trade when it's profitable for them. In other words, Citadel was handed information that WallStreetBets readers were looking to profit from a short squeeze on GME on a silver platter. And they didn't know that just because it had become a hot topic on Reddit – they knew it because they could actually see the order flow and dollar volume going their way. From there, it wouldn't take much to connect the dots and see who would stand to lose the most from those orders: hedge funds with significant short positions like Melvin Capital. Melvin Capital is not some sort of mismanaged failure of a fund. Since its inception in late 2014, Melvin Capital has been one of Wall Street's best-performing firms. It's grown from $1 billion in Assets Under Management from the start to over $20 billion prior to the GME run-up. And delivered over 50% returns to clients last year even after fees. So, when you think about Citadel being able to swoop in and purchase a revenue share of a historically strong-performing fund like Melvin Capital for bargain bin prices… you have to wonder… How early were they able to see the writing on the wall? Did they even accelerate the process themselves? Even when Wall Street loses, Wall Street still manages to win. The Rise of Retail InvestorsOf course, I'm not trying to make light of what retail investors, and WallStreetBets, have managed to accomplish. Though Wall Street still stands to profit the most from the whole debacle, countless retail investors have walked away with gains as well. And even just one month ago, the idea of retail investors being able to "take down" Wall Street hedge funds would have been unthinkable. Melvin Capital and Citron Research will survive, of course – rumors of them having to declare bankruptcy are greatly exaggerated. Melvin still plans on taking in another $1 billion in new money next month. And as Citron managing partner Andrew Left said on Wednesday "We'll become more judicious when it comes to shorting stocks. Doesn't mean the industry is dead, but it just means you have to be more specific." This wave of investment euphoria has begun to spill over to other targets like AMC Entertainment Holdings Inc. (NYSE: AMC) and BlackBerry Ltd (NYSE: BB). There's even been a call to action on the silver markets, to "squeeze the silver shorts" in order to trigger a new silver bull market: I can't deny that many people out there have made tremendous gains in GME — 685% returns in just four weeks is the stuff of legends. But I also have to offer a word of caution for those of you who find yourselves getting caught up in the hype. Even though fundamental valuation has gone out the window in this instance, I still have to say this: GameStop's business is not worth $450, not by any metric. With fundamental valuation gone by the wayside and even technical analysis breaking down, that means the forces driving GME's meteoric rise are purely based on investor sentiment.
That's the core of how markets really work. People buy what they think is going up. And sell what they think is going down. Lessons and the Next PhaseThis saga will continue. It's the establishment vs the rebels. But, no matter how things end up, there are two lessons to take away from all this:
They've proven that they can move the market in big ways, even to the detriment of multi-billion-dollar hedge funds. WallStreetBets has managed to accomplish what I've been trying to do with my own publication, Katusa's Resource Opportunities — put power into the hands of the retail investor. And the Katusa Army has changed the landscape of how money is raised with some of the largest financings in the resource sector in the last 12 months.
I can't stress this enough. Understand what you're investing in, and why, before you commit your money. While GME was a win — the win of a lifetime for many — there are many would-be investors who've been burned on WallStreetBets in the past as well, especially when it comes to options. Even DeepF*******Value, the person who kicked off GME's rise to prominence, had an investment thesis when they first entered into their long position all those months ago. I've personally taken on short sellers before and it's a vicious war. And our group wasn't nearly as big as it is today. But it gets very messy. And the game is armed with regulation, naked shorts and all sorts of tools that funds and brokerages can use. At the end of the day, educate yourself. And stay safe. Regards, Marin The post 'Sir, This is a Casino' — Shorts and What's Next appeared first on Wealthpress.  |
Named "WallStreetBets", this Reddit community is not a source of sage financial wisdom.
What caused this insane runup in GME's share price and trading volume?
With starting capital of just US$53,566.04, DeepF*******Value decided to take a long position on GME by purchasing call options. At this time, GME stock was worth just about US $4.50.
However, even despite this continual growth in GME's share price, short interest – in essence, the amount of people who were short selling the stock because they thought it would go down – stayed strong on the stock.| You are subscribed to email updates from Wealthpress. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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