META & AMZN down 30%, while Elon is Smiling

Oct 30, 2022 | Swing Traders look for opportunities as big tech sinks

Inflation is Slowing as Stocks Register More Gains

Stocks ended green this week, making it the fourth straight winning week for Wall Street. The S&P 500 is up nearly 4%, while the Dow saw the largest advancement, jumping over 5.5%. Meanwhile, the tech heavy Nasdaq also saw gains of over 2.5%.

Stocks continued their winning ways to close out the week, despite a tumble in Amazon share price, after economic data pointed to slowing inflation and a steady consumer. The market is starting to heat up, seeing some of its best gains since Nov 2021. Individually, the DOW just posted its best week since May. 

Weak Results from Big Tech

Despite all the gains, we did see some drops especially from big technology. Poor earnings had many of the biggest names in tech trailing downward. Microsoft, Meta Platforms, Alphabet and Amazon all saw red this week. All of these companies reported earnings, and all of them saw their stock trade lower afterwards. The lone bright spot in big tech was Apple, which seems to be nearly impervious to the rest of the mega cap stocks

Alphabet and Microsoft painted an especially gloomy outlook during their earnings call. This helped stoke investor fears of a global economic downturn. You can also attribute a soaring US dollar and weak demand as pain points for the tech sector. FAANG stocks such as Netflix, Meta, Amazon, and Apple have already lost a combined market value of more than $2.5 trillion so far this year. Those stocks shed another $300 billion last week alone. 

Alphabet missed Wall Street’s estimates in the third quarter as ad sales remained weak. While inflation and a strong dollar lead Microsoft to report its slowest topline growth in five years. This sent ripples across Wall Street, as several analysts slashed their target price for many of these tech growth stocks. 

Additionally, a slowdown in growth within Azure, Microsoft’s cloud services platform began to raise warning flags for Amazon’s cloud business. 

What it Means: Inflation is still running hot, but there’s hope that the worst could be behind us. While many areas of the market are beginning to turn things around, there are still troubling signals within big tech. Outside of Apple, many of the FAANG stocks have been trading down ever since reporting earnings. We’ll be watching to see how the tech sector reacts to more positive momentum across Wall Street.  

It’s Official, Musk Owns Twitter

We’ve reported extensively on the drama surrounding Elon Musk’s takeover of Twitter. Despite a lot of hurdles, and Musk nearly scrapping the deal, it’s official, Elon is now the CEO and owner of Twitter. The acquisition began on April 14th, and was concluded on October 27th. 

Nothing seems to have immediately changed with the new leadership in place, but the expectations for change have been everywhere. Elon continues to be one of the highest trending topics on Twitter. 

Musk has noted he will forming a content moderation council with widely dispersed viewpoints. He stated “no major content decisions will happen before that council is formed..”.

Since Musk’s takeover, many politically charged and controversial groups have openly talked about their excitement for Elon to own Twitter. There is growing concern this may lead to more hate speech and abuse on the platform.

What it Means:  After months of back and forth, Elon Musk officially owns Twitter. While no major changes have been announced, we expect a slew of updates will be coming down the pipe soon. With Musk known for being controversial and often outspoken, it’ll be interesting to see how content is moderated on the platform going forward. 

Weekly Swing Trades

Stock 2

December 18, 2022

Entry Price:

74.20

Stop Price:

72.65

Target Price:

77.20

Time Frame:

3 Week Hold

Caught a key support level last week. Monitor your 5 & 9 day moving average to ensure we don't lose momentum for this swing trade. Full info for our premium members.

Stock 1

December 18, 2022

Entry Price:

118.09

Stop Price:

114.24

Target Price:

125.08

Time Frame:

4 Week Hold

Classic moving average play here, looking for support off the 50 day MA. Closing last week, there was a slight uptick. If momentum holds, should make for a nice swing trade. Full info for our premium members.

Adidas Breaks Up With Kanye

Adidas ended its seven year business relationship with Ye, formerly known as Kanye West earlier last week. This came in response to a series of antisemitic remarks made by Ye. Kanye would go on to say he lost over $2 billion in a single day, after Adidas and many others looked to sever ties with the controversial artist. The move is expected to remove close to a billion dollars off Adidas’ bottom line this year alone.  

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Market Performance- Week of 12.18.2022

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Weekly Watchlists

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Weekly Review

Market Performance- Week of 12.18.2022

Recent Winners

BLDR (Builders Firstsource)

BLDR (Builders Firstsource)

Entry Price:

62.30

December 18, 2022

Price at High:

70.00

Return for Members:

11.00%

Timeline:

3 Week Hold

Simple moving average play here. Anticipating a 3-4 week swing trade as momentum has been growing for a move up.

EVI (EVI Industries)

EVI (EVI Industries)

Entry Price:

18.11

December 11, 2022

Price at High:

26.92

Return for Members:

48.64%

Timeline:

3 Week Hold

We're tracking EVI on its 4-hour chart, specifically looking at the 50MA as a level of support. If we can bounce, there is enough momentum for a quick swing trade.

FMC (FMC Corp.)

FMC (FMC Corp.)

Entry Price:

128.14

December 4, 2022

Price at High:

134.38

Return for Members:

4.90%

Timeline:

1 Week Hold

FMC has been on a bull run over the last month. As Swing Traders, we'll look to take advantage of the momentum and get in for a quick trade. Wait for a brief pull-back before entering.

Recent Watchlist Winners

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