If you want to get better at anything…
… find someone who’s already excelling and learn from them.
It’s true that I’ve made over $3.5 million in trading profits since I’ve started trading…
But I wouldn’t be writing to you today if it wasn’t for the mentorship I’ve received from Tim Sykes.
And for that, I’m forever grateful.
So you better believe I’m all about studying Tim’s Overnight Profits strategy.
Now that I’ve shared my latest plans to keep learning with you, let’s talk about something I’m watching right now. I believe it could set us up for some nice trading action in the coming days.
That brings me to something that’s on a lot of people’s minds…
Have the markets bottomed?
It’s finally starting to feel like the momentum is turning back toward the bulls’ side.
Even FB was green today (more on that later)…
As bulls wet their beaks for another rally, retail traders on message boards like Reddit and Stocktwits are coming out again in hopes of recapturing the glory witnessed in 2020.
You see, it’s been months since people cared about what Reddit traders have been thinking…
Their beloved SPACs, IPOs, and high-tech growth stocks have gotten decimated.
But “left for dead” is making a comeback today.
Let’s break them down…
Peloton Interactive (NASDAQ: PTON)
Along with another name on this list, comments about PTON exploded on Reddit message boards this week.
It was a huge week of news for the trendy exercise bike manufacturer (and the price action has been equally crazy). PTON stock is up a whopping 45% this week.
If PTON squeezes to $50 or $60, maybe I’ll consider buying puts.
If the company isn’t bought out, I think it’ll likely go back down to the mid-$20s.
All of this price action is very speculative … I’ll be staying on the sidelines for now.
But there’s still a lot we can learn from how the stock reacted to the news.
Let’s break down some of the big events that took place recently for PTON stock…
- Q2 earnings report
PTON recently reported weak Q2 earnings. The company missed estimates, reporting revenue of $1.13 billion, just 6% higher year-over-year.
- CEO John Foley stepped down
CEO John Foley isn’t very popular … but can we blame anyone for hating this guy? He bought a $55 million beachfront mansion just as his company’s share price was plummeting to all-time lows. Not a cool move, bro.
The silver lining on the earnings call was the announcement that Foley will be stepping down as CEO. He’ll be replaced by Barry McCarthy … and the market seems to like this decision so far.
- Firing 2,800 employees
On top of missing revenue estimates, PTON announced they’ll be letting 2,800 employees go in an attempt to cut costs. Yikes.
- Buyout rumors
I think the real reason PTON is getting so much chatter online this week is due to suspicious buyout rumors.
A recent article suggested that Amazon.com Inc. (NASDAQ: AMZN) or Nike Inc. (NYSE: NIKE) could benefit from buying PTON outright.
That’s all the WallStreetBets crowd needed to hear…
As you can see, most of the news this week was BAD. But the stock is still up almost 50%!
The lesson? You have to be prepared for ANYTHING when it comes to trading crazy momentum stocks.
That being said, this one’s too crazy for me right now. Onto the next…
Digital World Acquisition Corp. (NASDAQ: DWAC)
I’ve been watching DWAC — the “Trump SPAC” — all week for a potential massive short squeeze.
But the chart just never got the momentum I was looking for.
On Monday, it looked like it was really gaining steam heading into the close…
Then, after a hard fail at $97, the chart got DEMOLISHED in the last half hour of trading.
This completely ruined any momentum that was building.
At that point, I started to look at buying puts…
This may seem confusing, but if we zoom out and think about the big picture, a reversal could be in play if DWAC fails to crack $100.
Big picture: DWAC is up 60% in a month, so if a major squeeze doesn’t happen, it’s just as likely that the stock could crash back to support.
Key Levels: $100 (resistance) and $65 (support)
I didn’t pull the trigger on puts. The contracts were way too expensive to make the risk/reward worth it.
While this stock intrigues me, I’m glad I’ve been conservative in trading it so far.
It’s not squeezing (or dumping) as much as I’d like to see … but I’ll keep watching it closely.
Meta Platforms, Inc. (NASDAQ: FB)
We covered this stock in detail on Monday, so I’ll keep this one short.
However, the backdrop finally seems to be shifting for out-of-favor tech giant FB.
Today, we got a first green day with pretty strong volume.
If FB has found a bottom at $216, I think a run back to $250 or $260 is possible.
I’ll be watching FB closely tomorrow (and next week) for a potential calls play, but I’m not jumping into anything just yet.
Key Levels: $250 (resistance) and $215 (support)
Long setups are starting to look better and better, but we’re not out of the woods yet.
I think it’s important to be skeptical of any rallies in this market. Be nimble. Always expect the unexpected.
And don’t forget to join me tonight at 8 PM ET when Tim reveals Overnight Profits!