Good morning!
$SNAP shook the tech sector, and then some. The earnings were a miss on revenue due to $AAPL’s privacy changes, which hindered ad revenue. They did not expect such an impact from Apple’s consumer friendly settings and therefore the stock fell a whopping 25%, and dragged with it $FB & $TWTR by 5%, and $GOOGL and $PINS by 3%. Was it an over-reaction? Yes, especially when talking about $GOOGL, which will be able to benefit from its ads, which are not affected by Apple. This move in the tech giants, brought the $QQQ down with them, obviously, but $APPLE was left untouched. In aftermarket I entered a small position in $FB and $GOOGL when they were down, and trimmed when they bounced back some, since in my opinion it was a disproportionate move related to $SNAP. To end this idea, I would like to emphasize again why it is important not to go with stock into earnings, because the losses are impossible to be controlled. I only took a paper cut in my $SNAP option calls, but I did not give back my day. The same happened with $FB and $GOOGL, as I only had option calls, which still have time to recover by next week.
On another note, aside from the tech sector, we had another mover in the market, also in the social media arena: Digital World Acquisition Corp. The news was everywhere, that the SPAC company announced a merger with Trump’s social media platform. The stock $DWAC increased 350%, and we caught it when it was just $11 and change and rode it all the way to $27, for a massive gain. It went all the way to $73 in after hours. This is a news driven stock in which you have an opportunity for impressive gains if you follow it closely, play the levels, and then leave a sum you are comfortable with to ride it out. I hope you followed our tweets and you engaged this name with us.
$QQQ Chart
In after hours the $QQQ was hit, as I mentioned above, and today we might get a red to green trade, if the analysts consider this to have been a drastic move in the giants, and separate a smaller company like $SNAP from giants like $GOOGL and $FB. It went down from $377 to $373, but it managed to hold and not go all the way into the 8 day at $370.92. Expect another shake when the market opens and see if it holds this level, where you could try and nibble some $GOOGL or $FB for a bounce. I would be very careful though, as it can get noisy and you may stand to loose the previous days’ gain until you are right.
https://www.tradingview.com/x/RO1IQNfJ/
$IWM Chart
The $IWM showed signs of life yesterday and it made me want to buy some call options for $230 for next week, hoping it goes out of this channel. It did not manage to do this move yet, but today might be the day, since some small caps were strong yesterday, and maybe we’ll see some recovery towards February’s highs in the near future.
https://www.tradingview.com/x/LrBjsQkk/
$PHUN Chart
This is a penny stock and it also related to the Trump madness move, of $DWAC. However, this impressive move in the afternoon was based more on an article from last year, and it managed to push the stock above all the moving averages, for an impressive gain. I left trailers for today because it is a news driven stock and even if it is technically healthy now that it is above all the lines, it can always fall back and the losses can be quite substantial. It should hold at around $1.59, and it can be accumulated and trimmed all the way into $2.47. I don’t recommend having FOMO, because you may find yourself on the losing end. These kinds of stocks should be approached with care, and with a sum you are comfortable to lose because they can go either way, and leave you breathless.
https://www.tradingview.com/x/fy2bghul/
For today I am looking at damage control in my call options for tech, and I might cover the short side in $FB just to be cheeky and try and win both ways. I never put large sums in my earnings plays and therefore I have room to play around with them. Look at the small caps for a possible move out this channel and watch the news driven stocks $DWAC and $PHUN for a possible day 2.
Have an amazing weekend, you deserve it!
We Grow Together!