COVID Lockdowns are Spreading Fast

Nov 21, 2021 | How should swing traders play more COVID lockdowns?

Weekly Newsletter- Week of 11.21.2021

More Covid Lockdowns Coming?

As the pandemic has been slowing down here in the states, other countries haven’t been as successful in managing the virus. It looks like another surge of Covid cases has begun to run rampant through many parts of Europe. This has led to another spike in cases in various parts of Europe. This has caused some countries to take extreme measures and implement regulations that would mandate vaccinations for their citizens. Meanwhile, other countries are once again debating whether a full-blown shutdown is needed once more. Many European leaders have been hesitant to take such extreme measures given the long-term economic impacts of stay-at-home orders.

Spiking Cases Once More

As we previously noted, many countries around the world are reporting covid numbers not seen since the early stages of the global pandemic. For example, just this week, Germany set a new daily record for new covid cases when they reported 65,000 in one-day increases. Neighboring country the Netherlands reported over 25,000 new Covid cases just last Wednesday. Despite the resurgence of the virus and its many variants, countries are cautious to implement new preventive restrictions yet again. Regardless of where you live, you have undoubtedly felt the long-term effects of the pandemic on your own economy. World leaders are doing their best to maintain operations, despite the growing uncertainty.

The prime minister of Belgium recently announced their hospital system was once again reaching critical capacity levels. One of the biggest problems throughout the pandemic has been the immense strain and pressure the growing cases can have on a country's hospital team and medical staff. Meanwhile, other countries are implementing protocols that will require proof of vaccination for many common indoor events. Whether you're looking to have dinner, go shopping, or catch a new movie at the cinema, you may be forced to provide proof of vaccination to participate going forward.

Violent Protests

As uncertainly regarding the pandemic is once again rising, so are people’s anxiety levels. Many European countries have recently seen an uptick in violent protests as their citizens lament the possibility of once again being locked indoors. For example, 5 police officers were injured during violent protests in the Netherlands this week. Vienna noted nearly 40,000 people in attendance for a recent rally to protest the forced restrictions. Austria will once again be implementing lockdown procedures while also forcing its citizens to get vaccinated. This is seen as s huge move as most international leaders have been reluctant to legally enforce vaccination states.
Mandatory vaccination regulation has unsurprisingly been met with great resistance and pushback. As covid cases are once again on the rise, we'll be cautious watching the U.S. markets to see how they react to the news.

Weekly Swing Trades

PNRG (Prime Energy)

October 2, 2022

Entry Price:

80.62

Stop Price:

76.85

Target Price:

88.04

Time Frame:

1 Week Hold

Expecting a short-term bump after a recent OPEC+ announcement regarding the a supply constraint to oil. The constraint would result in ~1M less barrels of oil per day, which should cause a price jump. Low RSI and bouncing off our 250 day moving average, both hallmarks of a good swing trade.

DV (Doubleverify)

October 2, 2022

Entry Price:

27.75

Stop Price:

26.75

Target Price:

29.00

Time Frame:

3 Week Hold

Using our moving averages heavily on this swing trade, look for continued strength as we try to notch out a 6-8% gain. Specifically, we are taking advantage of of a recent cross over in the 50 day moving average. Last week closed down, so wait for confirmation of a reversal.

What exactly is the metaverse anyways?

Thanks to Facebook’s massive rebranding and renaming campaign, the term ‘metaverse’ has become the stock market’s new favorite buzzword seemingly overnight. Now known as Meta Platforms, the former Facebook has been one of the key champions beating the drum over the possibility of the metaverse. As earnings season continues to roll on, we've seen more and more CEOs report on how the metaverse could impact their businesses. Throughout earnings season, we've heard companies attempt to define, what is the metaverse? How do they think it will ultimate playout? And how will each company attempt to capitalize on the apparent craze? Some companies have downplayed the entire metaverse all together. While others are taking a wait-and-see approach.

Is the metaverse already here?

Some analysts have been arguing that the metaverse is not a new idea. They note how games like Roblox have been allowing friends to interact, play and socialize in virtual environments for the last several years. Roblox allows users to play, create games, and interact with their friends through avatars all within a 3D rendered environment. When Facebook announced its massive rebranding campaign, they talked extensively about how they have been planting seeds for the new pivot for years. You may not know this, but Facebook already has an entire catalog of products all focused on virtual reality. Sales for their top moving Oculus Rift device have been seeing a steady increase over the last several quarters. Meta platforms has also been prioritizing new 3D glasses. While google glasses were widely seen as a failure when they were first released a decade ago, Facebook seems an increasing number of use cases tied to the metaverse.

Stocks to Benefit

It’s obvious Meta Platforms intends to be a long-term winner in this new virtual sector. Not only have they legally changed their name, but they are also pivoting all operations to focus on the future of the metaverse. With the growing suite of software and hardware devices, Meta Platforms intends to be a key driver for the metaverse. Chipmakers focused on the future of the metaverse are also expected to benefit from these technological advancements. We’ve already seen semiconductor stalwarts AMD and Nvidia shares erupt after reporting on their plans for the metaverse. While Meta Platforms will drive adoption with new devices, these semiconductors will be needed to power these new technologies. While Nvidia has been a regular stock market winner as of late, shares have exploded over 45% in just the last 30 days. As with any new disruptive technology, there will be several winners to come from this space. As the metaverse expands, we’ll keep reporting on any new players primed to benefit from the technology.

El Salvador Plans first Bitcoin City

We’ve reported extensively on El Salvador’s plans to deepen its connections with Bitcoin. As one of the first countries to make Bitcoin legal tender, El Salvador continues to be a pioneer for cryptocurrency. This week the country announced plans to introduce the first-ever 'Bitcoin City" funded initially by Bitcoin-backed bonds. El Salvador has big plans to harness cryptocurrency to fuel investment growth in the country. The city will be built at the base of one of the country’s volcanos, while Bitcoins will be used to fund the project.

The new city will be used to expand upon the countries Bitcoin mining operations.

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Weekly Watchlists

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Weekly Review

Market Performance- Week of 09.25.2022

Recent Winners

SBUX (Starbucks)

SBUX (Starbucks)

Entry Price:

85.00

September 11, 2022

Price at High:

89.90

Return for Members:

5.76%

Timeline:

2 Month Hold

Strong momentum over the last few weeks. Watch for a mean reversion, but if moving averages stay consistent look for an early play to open the week.

PNRG (Prime Energy Resources)

PNRG (Prime Energy Resources)

Entry Price:

83.20

September 4, 2022

Price at High:

100.00

Return for Members:

20.19%

Timeline:

3 Week Hold

PNRG had a drawdown to historical levels of support (around the 100 day moving average). Looking to make an entry in the coming days as we also have macro tailwinds with the energy crisis in Europe.

PYPL (Paypal)

PYPL (Paypal)

Entry Price:

87.00

August 28, 2022

Price at High:

103.00

Return for Members:

18.39%

Timeline:

4 Week Hold

Playing off the dip in June, we're starting to see momentum as the 50MA is crossing over the long-term averages. Look to for momentum to continue and an early entry on Monday.

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