As you may or may not have noticed, I’ve had a bit of a streak going over the last several weeks. Back in early July I had planned a “fat pitch” style event that would offer incredible and easy opportunities that would take place in certain stocks. The same stocks that were slaughtered at the beginning of the year, which had been investor favorites of 2013, but have turned into murder holes that most are afraid to touch. Not long after road mapping that this event would take place, Janet Yellen called into question the valuation of these same companies. This still remains one of the most bizarre events of the year in my opinion, in a year full of several twists and turns.
Last week we did a top down analysis of the biotech sector, which is looking stellar here. After consolidating over the course of the year, stocks are breaking out left and right. New leaders are separating from the pack, and momentum plays are just warming up. Some of our favorites are still actionable here, including JAZZ, BIIB, CELG, ALXN, ADHD, ARWR, ILMN, NVAX and XXII. That’s a long list, but its worth tracking each one of those stocks for the next 3-6 months. Here’s an updated chart of the IBB:
Our social media stocks, which were among the stocks I said back in the beginning of July would be “vulnerable to fast upside price swings” are melting up every few days. Investors are less exposed to these stocks, which creates a little “chase” when they firm up. Take note of stocks like YELP, GRUB, or P today…then look around at those that haven’t popped yet. Make those a part of your watchlist. We’re in the midst of that chase I warned about last month.
Last but not least, another momentum group that has lagged behind the market a little bit is solar. Notice the similar consolidation pattern here.
Lucky for me, my dude Dan Nathan is a solar bear. http://www.riskreversal.com/2014/07/31/chart-of-the-day-tan-sunset/
This post marked the low for a nice rally in the TAN. SUNE and FSLR are still my favorite plays here, but my position in CSIQ awoke from the dead today, which may perk up Chinese solar stocks in the near term as well.
All in all, there is a lot to be constructive about in terms of individual stocks. If these groups continue to perk, its going to provide some decent opportunities for us in the upcoming weeks. I’ll follow up with positions I initiate tomorrow.
Good night.
OA
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Any thoughts on the airlines – Lower oil prices?
No take on them here. They seem rich.
Dude,
You are a hard working man. Get some sleep.
you get some sleep
LOL. You are a nigh owl. Its 10:00 PM here on maui. But you are right I need to get up at 3:00 AM.
What hath Rich Kinder started , low beta high yeilding cheaply optioned MLPs commencing an unprecedented run .
MWE the flavor of the day
BREAKING: FSLR changes symbol name to SOAR and thereby saves OA hundreds of hours per week fielding questions about the fizzler. #notbroken #fslr72
You reversed the chart btw.
Damn formatting…fixed
OA – do you have a favorite china stock you could share with us? You say hated for the other groups and just thinking people hate Chinese real estate so wondering if ej / leju / sfun / hgsh / xin fit a similar bill
I own XIN for long term, but from a much higher price.
Pandora Dan is worried about a quick bounce and knows that implied volatility is cheap, yet doesn’t recommend a call. Is this guy serious?
$JAKK breaking out.
Forgot to mention 53% of float is short.
Chinese solar pulling a “Good news for people who love bad news” kind of paradox—seems almost too obvious to buy here.
Maybe, but the SUNE calls I’ve been sitting on for a month are coming back from the dead. Might even break even on them if this keeps up.
Sorry was trying to be clever…think we’re seeing consolidation after positive earnings (CSIQ, SOL), Chinese companies blowing out EPS estimates on higher GMs which has been my thesis all along…this will not last forever as new supply & technology will disrupt but incumbent Chinese Solars should start ramping up in the next year and beyond. I’m bullish.
One unappreciated risk-positive factor is an appeal of the recent DOC tariffs which could help negotiate them down even though it’ll take a while…in the near-term SPWR and FSLR are benefiting big time and SCTY was given the finger by its own country.
added the $N 85’s on the early dip this am and also added to the FSLR 70’s at support here to make it #YOLO style.
meeee 2 YOLO
picked up that CELG a few days back after watching that AHWOA seminar
bot AAPL 97.86s for a YOLO on the dip, but not at the lows
81% unchanged volume, woo I can’t handle this excitement.
Looking for a good bounce of the opening drive lower, but not expecting anything too big today
i tried to exit GOOGL around $4 but that door closed too fast. back to waiting.
My order was $1 off – was hoping the pre-market activity would hold into the opening, but you can hope in one hand…
anyone rolling out to sept calls with TWTR? debating between $46 and $47’s.
I wouldn’t sell the August here…but could add Sep.
amazing AMZN
MWE as advertised
NPSP … only for the brave
Take off the Sune 21.5s hold 22s
Added CNP
LULU sucks!
I was stopped out of Spet call eysterday and my next look will be when below 38 but above 37.7, probably hits there today or tomorrow
YOLO added to Oxford dictionary. http://www.bbc.com/news/uk-28783088
WX with the long awaited breakout, close to break even now. We’ll see if a move up ensues.
Adding YNDX Aug5 looking for it to follow GOOGL
*By adding, I mean buying in addition to GOOGL calls, not adding on to a previous YNDX position.
I plan on holding my WB calls through earnings tonight – anyone else?
$KING tanked before posting poor earnings and another one did too, forget which. $WB hanging in today so could be positive sign.
XXII should get MSA approval within a week or so… looking for a big jump once approved. Huge potential.
Quick move to 335 for AMZN here in a second?
NM, SBLK, FRO…rippin’ . some failed head n shoulders in the charts.
please tell me we’re not in that phase of this market move yet……
“I own XIN for long term, but from a much higher price.”
Jeff – I noticed you listed SFUN as your favorite China play. Could you clarify why? Is it because of sentiment surrounding China real estate or just chart?
Thanks again for your help! You’re very kind.
da fuq happened to da $bkx ticker in ToS?
Hey OA,
Are you still in VNET? For the past few days I’ve been in the negative gains and roughly around a 5% loss. Should I just wait it out?
My $TFM and $AMBA positions starting to take shape. Still riding last GOOGL 585 weekly. My Aug DDD 56, CYOU 28, and complete lotto TNA 87 going to expire worthless. Stopped out $IFON around open.
Watching $MYL and $ENDP
XONE – green?
Is SSYS a buy here? seems like you stop out fairly quickly if a break below 111 isn’t quickly bought up.
News was bad on these and they just can’t seem to go down anymore. I like VJET
Exciting time to be bullish..all on board Jeff