IPO's Hold The Market's Secret (June 20-June 23)
Happy Sunday everyone and welcome back to the Rippy Global weekly outlook. The market went on a rampage into OPEX where we finally got a glimpse of some sellers. This strength is killing every permabear who ignored what the charts and tape was telling them and that is exactly what the markets were meant to do: kill those who don’t adapt. For example, a few months ago, Big Short Burry (Michael Burry who famously shorted the 2008 crash) tweeted this admitting he was wrong and he flipped very long.
Remember that the markets employ the smartest people, they are always ahead of you, so this is your friendly reminder to adapt!
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Last week, the CAVA IPO was a smashing success with opening shares priced at $22, and they actually went to $48 that day. If you don’t know CAVA is a Mediterranean restaurant chain. One of the reason I’m so interested in the IPO market right now is this:
One can see how one of the bottom signs is a lack of IPO’s which is what has been happening up until now. That’s why the CAVA success is good for the market, the New York Stock Exchange President stating that companies are finally looking at IPO’ing now from the last 18 months, ending the drought of IPO’s. This year we have had 44 IPO’s raising a total of $7.3B vs. 2022’s 71 that raised $7.7B.
One sector to watch is the clean energy sector. The NYSE President said “[c]learly energy, particularly anything around clean energy. the green energy transition, that is having a very positive reception from investors at the moment.”
Sports betting investors should also be looking forward to some exciting months moving forward. DraftKings just surpassed Fanatic’s deal for PointBets (they trade over the counter under ticker PBTHF’s) for their USA assets. Here’s where things get interesting (and how I can connect this back to the IPO market): Fanatic’s hired Meta’s head of investor relations as they are interested in going public. If they announce an IPO soon, I would watch PBTHF as a continued trade for a cheap sports betting play..
Now let me get a bit pessimistic: strategists at Goldman Sachs believe inflation will continue to cool, BUT they think the markets are too optimistic about it and that inflation will not cool at the pace that investors think it will. Goldman Sachs even suggests a trade for those who believe that inflation will remain elevated, recommending buying one-year swaps to bet on inflation exceeding current market expectations.
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#1) In terms of earnings we have another dry week. Nothing much this week, although FedEx can give us a hint into how much consumers are shipping.
#2) On Tuesday, crude oil contracts settle and the Jefferies Consumer Conference will give investors a look into how consumer spending is.
#3) On Wednesday, Fed Chairman Powell is testifying to the House Financial Services Committee. The Fed members are off their blackout period and they are using it to their full advantage- we’ve got a lot of speakers. INTC is also hosting an investor webinar.
#4) On Thursday, Powell is testifying to congress and will therefore cause some movement into the markets again.
——-
S&P 500
The S&P 500 ($SPX index) continued its breakout but closed weak. I am looking for a bit of a cool off week.
My key breaks are $4451 for bulls and $4368 for bears.
The best ways to play the S&P 500 are via. SPY/SPX options or SPXL (3X Bull S&P 500 ETF.
——
INDIVIDUAL STOCKS & LEVELS
Let’s recap some of the levels of some popular names:
TSLA
Tesla made the move I have been talking about in previous articles, violently running up and blowing out shorts. Over $264 this can continue up to the $290 level. Options flow is very bullish.
AAPL
[INSERT AAPL]
Apple on the weekly chart has broken out of this resistance level. I think a good price target is the Goldman Sachs’s target of $210. Options flow is very bullish on this name as well.
W
Wayfair is a great chart that’s on the verge of a breakout. It also has noticeable short interest for a company of this size and tends to run hard when it goes. Watching for a breakout this week.
——-
Insider Activity
In terms of insider trades, I think the best one is GME GameStop from activist investor Ryan Cohen. This can be a good momentum trade.
——-
High Short Interest Stocks (MarketWatch)
#1 - CVNA 57% SI
#2 - ALLO 52% SI
#3 - BYND 46% SI
#4- EH 45% SI
#5 - BIG 41% SI
——-
Top Options Trades on Friday
——-
Biotech Stocks Catalyst Watch
HALO, ARGX, ZLAB - PDUFA June 20th
ALDX - PDUFA June 21st
SRPT, ICPT - PDUFA June 22nd
——-
Thanks for reading this weekend’s article, have a great week!
-Adit Dayal (https://twitter.com/tradelikehulk)
Remember that the markets employ the smartest people, they are always ahead of you, so this is your friendly reminder to adapt!
——-
Last week, the CAVA IPO was a smashing success with opening shares priced at $22, and they actually went to $48 that day. If you don’t know CAVA is a Mediterranean restaurant chain. One of the reason I’m so interested in the IPO market right now is this:
One can see how one of the bottom signs is a lack of IPO’s which is what has been happening up until now. That’s why the CAVA success is good for the market, the New York Stock Exchange President stating that companies are finally looking at IPO’ing now from the last 18 months, ending the drought of IPO’s. This year we have had 44 IPO’s raising a total of $7.3B vs. 2022’s 71 that raised $7.7B.
One sector to watch is the clean energy sector. The NYSE President said “[c]learly energy, particularly anything around clean energy. the green energy transition, that is having a very positive reception from investors at the moment.”
Sports betting investors should also be looking forward to some exciting months moving forward. DraftKings just surpassed Fanatic’s deal for PointBets (they trade over the counter under ticker PBTHF’s) for their USA assets. Here’s where things get interesting (and how I can connect this back to the IPO market): Fanatic’s hired Meta’s head of investor relations as they are interested in going public. If they announce an IPO soon, I would watch PBTHF as a continued trade for a cheap sports betting play..
Now let me get a bit pessimistic: strategists at Goldman Sachs believe inflation will continue to cool, BUT they think the markets are too optimistic about it and that inflation will not cool at the pace that investors think it will. Goldman Sachs even suggests a trade for those who believe that inflation will remain elevated, recommending buying one-year swaps to bet on inflation exceeding current market expectations.
——-
#1) In terms of earnings we have another dry week. Nothing much this week, although FedEx can give us a hint into how much consumers are shipping.
#2) On Tuesday, crude oil contracts settle and the Jefferies Consumer Conference will give investors a look into how consumer spending is.
#3) On Wednesday, Fed Chairman Powell is testifying to the House Financial Services Committee. The Fed members are off their blackout period and they are using it to their full advantage- we’ve got a lot of speakers. INTC is also hosting an investor webinar.
#4) On Thursday, Powell is testifying to congress and will therefore cause some movement into the markets again.
——-
S&P 500
The S&P 500 ($SPX index) continued its breakout but closed weak. I am looking for a bit of a cool off week.
My key breaks are $4451 for bulls and $4368 for bears.
The best ways to play the S&P 500 are via. SPY/SPX options or SPXL (3X Bull S&P 500 ETF.
——
INDIVIDUAL STOCKS & LEVELS
Let’s recap some of the levels of some popular names:
TSLA
Tesla made the move I have been talking about in previous articles, violently running up and blowing out shorts. Over $264 this can continue up to the $290 level. Options flow is very bullish.
AAPL
[INSERT AAPL]
Apple on the weekly chart has broken out of this resistance level. I think a good price target is the Goldman Sachs’s target of $210. Options flow is very bullish on this name as well.
W
Wayfair is a great chart that’s on the verge of a breakout. It also has noticeable short interest for a company of this size and tends to run hard when it goes. Watching for a breakout this week.
——-
Insider Activity
In terms of insider trades, I think the best one is GME GameStop from activist investor Ryan Cohen. This can be a good momentum trade.
——-
High Short Interest Stocks (MarketWatch)
#1 - CVNA 57% SI
#2 - ALLO 52% SI
#3 - BYND 46% SI
#4- EH 45% SI
#5 - BIG 41% SI
——-
Top Options Trades on Friday
——-
Biotech Stocks Catalyst Watch
HALO, ARGX, ZLAB - PDUFA June 20th
ALDX - PDUFA June 21st
SRPT, ICPT - PDUFA June 22nd
——-
Thanks for reading this weekend’s article, have a great week!
-Adit Dayal (https://twitter.com/tradelikehulk)