Happy Saturday and welcome to our Weekly Digest! We had a very busy week on Wall Street. Earnings from $NFLX, $TSLA and $SNAP added an extra twist to the usual story. Donald Trumps’ new venture into social media spiced things up on Thursday and Friday as the markets remembered the $GME saga with 2 new names $DWAC and $PHUN.
Overall the indices had an impressive run and became extended by the end of the week. As $SNAP disappointed and the $SPY made a double top, we retreated by the close but still managed to defend the exponential moving averages. Tech was hit harder as $FB and $GOOGL are considered sympathy plays to $SNAP in the ad arena.
Our portfolio had a good performance as we managed to ride this wave higher, and booked nice profits in $MSFT, $NVDA and $AMD. We had call spreads in $NFLX and $TSLA which seemed lost at one point before becoming extremely profitable.
The cherry on top of the cake was our engagement of $DWAC and $PHUN which combined added a nice boost to our overall weekly performance.
The past week had been characterized by several double tops such as $BTC, $ETH and $SPY and several impressive breakouts such as $TSLA, $NFLX and $MSFT. We continue to remain vigilant and tactical at this stage.
We are cautious going into next week’s action as the main actors in tech report earnings. We will start the week with $FB, followed by $GOOGL, $MSFT and $AMD and will close it on Thursday with the reports from $AAPL and $AMZN.
This week in general is characterized by wild swings depending on the reports, so as always we suggest using options to remain involved rather than owning stocks into binary events.
Please find below a summary of our best trades of the week:
Donal Trump continues to be a dominant voice in the US and his actions have immediate consequences. After being banned from the mainstream social media platforms such as Facebook and Twitter, the former President announced on Thursday the creation of his own platform, Truth Social. In order to take his company public, he will merge it with a SPAC, namely $DWAC. On news of this, we engaged $DWAC at $12 in pre-market and watched the show. What continued was a frenzy buying bonanza by both Trump supporters and retail investors remembering the GameStop saga in January. We managed to hold our position ‘only’ until $27 and exited for an impressive profit. The next day we day traded it a bit and managed to squeeze some more out of it. Such parabolic moves happen rarely, and when they do, one has to be quick on his feet, take advantage, and exit with a nice profit, and most likely never look back:). As we learned what happened to $DWAC we moved on to the next one before the market close on Thursday, $PHUN.
$PHUN has been a sympathy play with $DWAC as news hit the tape that this company has been in talks with Trump’s other companies for a possible collaboration. We bought some $PHUN at 1.20 for a wild ride. We sold half at $1.8 before the close but decided this time to keep some for a possible Day 2 action. We were rewarded on Friday, when we exited our remainder at 20 and 22. What an impressive move! Both of these plays were purely news driven, and when they hit the tape you have to decide if you want to ride the wave or not. Do not have FOMO into next week chasing these names, as the last ones to the party will be those who will pay the final bill.
Moving on to some serious stocks, $TSLA continued to be special as it announced its best quarter ever on Wednesday. It was sold in after hours and reached a low of 850. On Thursday, being long options 870/900 we had little hope of salvaging them. As soon as $TSLA reclaimed 857, we went long for a wild ride to 900. We exited our call spreads for a triple and kept the stock for a possible breakout above the all time high. We were rewarded on Friday, despite overall weakness in the market, as $TSLA pushed to 910. We continue to be long the stock for next week.
We hope you had a great trading week and managed to dip your toes into some winners such as $MSFT, $NFLX, $TSLA, $AMD, $PHUN, $F, or $DWAC! For next week we are approaching the week lighter than usual and with a hedge on against our options plays for the big tech companies. Keep in mind that this week will most likely dictate the path for the end of the year at least for the tech sector.
Have a great weekend, relax, and comeback strong on Monday for what will most likely be a tiring, news-packed trading week!
We Grow Together!