Delta Variant Spooks the Markets

Jul 11, 2021 | Swing Trading the Delta Variant and how to get rich off it

Weekly Newsletter- Week of 7.11.2021 

Delta Variant Spooks Investors 

It’s impossible to ignore the growing concern over a second wave of infections from the virus. As the ‘Delta’ variant continues to spread, investors are building their risk models and leaving the markets in a state of uncertainty. The CBOE Volatility Index, which we commonly reference on our pages as a method for measuring market sentiment, also spiked nearly 20% this week. The fear of another round of shutdowns resulted in all major indexes having a 1-2% drawdown. 

As investors, it’s important to watch how other countries are handling the pandemic and what key sectors are impacted. As we’ve witnessed for months, the United States economy, while strong, still relies heavily on other regions for logistics and supply chain support. In the US, several states are starting to feel the pressure of potentially reinstating indoor mandates. Should that happen, the recent market selloff we’ve been witnessing may continue and intensify. While being approved for emergency use, we still have no FDA approval for any of the three major vaccines being utilized in the US. Monitor any news reports here as we’d expect significant price action should an approval go through. 

Chinese Markets & The Impact of an Overreaching Government

DiDi was a recently listed IPO with a ton of enthusiasm and momentum. Once dubbed the "Uber of China", DiDi was considered one of the few Chinese stocks worth investing in. However, due to potential regulatory concerns, multiple lawsuits, and government intervention, the stock has dropped over 26% in the last 5 days alone. With new demands from the Chinese government over user limits and app store de-listings, it’s important to remember the risks associated with investing internationally. In China’s case in particular, we’ve talked extensively about their regulatory interference when it comes to crypto. We should also be mindful to not forget their interference in the public markets as well. The entire sector of Chinese stocks all saw losses this week. 

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.

Looking Ahead: Earnings Season is Here 

Earnings season is upon us as banks are set to kick off the second quarter of earnings this week. As most investors know, the financial sector earnings are always vital because they help set the tone for the rest of the following weeks to come. Given how far our economy has come since this time a year ago, year-over year numbers are expected to be very positive and we might see significant price action as a result. Aside from financials, there are a couple of other stocks we'll be watching. Both Pepsi and Delta Airlines are also reporting this week.

Upcoming Economic Reports

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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.

Recent Watchlist Winners

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