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Last week we generally saw the markets pull back with more fears of growing inflation, rising treasury yields, and jobless claims data came out. Currently the 10 year treasury ($TNX) is more than 1.73%, and I assume that it isn't going to slow down this week. If we take comparable examples from 2016/2018, I believe we might have one more shaky month left of this roller coaster of a market; 2% might be in sight.
No matter if we hit 2% or not, it is just a matter of time before this fear gets priced in. The $QQQ bounced back from the low point, $297.45, and seems to be holding key support of $310. This week it is critical that the $QQQ holds this level, and I'll be looking for it to finish above $320.
At the time of this writing, Nasdaq and S&P futures are showing a little green.
Adding to the Watchlist:
The VanEck Vectors Gaming is a Gaming ETF that includes casinos and casino hotels, sports betting (including internet gambling and racetracks) and lottery services as well as gaming services, gaming technology and gaming equipment. Most notable holdings include, Las Vegas Sands, Draft Kings, MGM, Caesars, Sands China etc. Last week Las Vegas has opened up, and I expect that this summer will be even better as many Americans have been cooped up for to long and will want to go on vacation.
Currently $BJK is near all time highs, however I expect most of their holdings to have significant growth by the summer. I expect that a 20-30% target is doable by end of year, probably sooner if the rotation into cyclicals and re-opening plays continues.
Target Price: $70
Timeframe: 4-6 months
$SNOW: Snowflake Inc. is a cloud computing-based data warehousing company based in San Mateo, California. This recent IPO is almost back to IPO levels. There has been a decent amount of negative news surrounding this company, however I take it as a time to buy. I've covered this stock before, and not that much has changed. I'm interested in debit spreads. The risk/reward ratio checks out on the $230/240 vertical. If the triple Q pushes up to the 50MA, this could have a serious impact on smaller tech plays. Long term I think that $SNOW could hit upwards of $400, however for this short term play I'm setting the target at $260 and timeframe according to my option play.
Target Price: $260
Timeframe: 2-4 weeks
$CLII: Climate Change Crisis Real Impact Acq Corp is another SPAC charging station play similar to $SBE, that we discussed. They are suppose to be merging with EVgo. The EVgo and CLII merger deal is expected to close in the second quarter of 2021. The merger is subject to approval from CLII’s shareholders and other customary closing conditions - which is why $SBE price sold off on news of a delay in sharing holder voting. Of course, with all SPACs we need to be careful; a lot is based on rumors and conjecture. Holding commons, I believe, is the safest strategy here, however it is in such good deal territory plus not wanting to put to much capital into it, I want to get a call option on it. I'm adjusting target and timeframe data based on an option play I'll be doing.
Target Price: $16
Timeframe: 2-4 weeks
$TSLA: Even though the Chinese government has banned its military personal from driving their cars, I believe the stock will move upwards this week. First of all, is it really a surprise that this is happening? Of course, there is always overreaction in the markets, but in my opinion this is no different than fortune 500 companies, or US government personnel from not being allowed to use Chinese software like WeChat or Zoom for example. Of course, Tesla collects data that is necessary for their AI and autonomous driving.
On a very positive note, Ark Invest and Cathie Wood has set a new target price of around $3000 by 2025 for $TSLA. My target is $1200 by the end of the year. I don't agree with everything Cathie does, but I do tend to agree with Queen Cathie on this one.
The Cybertruck sales, estimated by some, of $50B per year plus the fact that the Model 2 will be shown at the Guangzhou auto-show in November this year will propel Tesla past $1000, I believe. After all it was trading at mid $900s before the latest tech dip. For a 4 year price target for Tesla, the autonomous and fully self driving tech will easily help the stock achieve this. Tesla is still years ahead of its competition in terms of vehicle production and battery tech, however much further along than any company in terms of AI. Tesla has by far the most data collected by its cars on roads than any other company out there. The victor of the AI and FSD race will be won by who has the most data. In my opinion, this is a much bigger industry than just producing cars. Tesla is more like a tech and software company than a vehicle manufacturer. The investors that fail to realize that will be left behind.
Target Price: $1200
Timeframe: By EOY
Note: Risk (1 out of 5) is my opinion of how risky the stock and these plays are; 1 being the lowest and 5 is the highest.
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