Tesla beats deliveries, new yearly inflows, Omicron worries

Good morning and Happy New Year!

We are excited to start a new trading year together with our Eclubtrading family. 2021 has been a tricky year, despite the $SPY and $QQQ posting impressive gains, a plethora of strong stocks from 2020 were completely obliterated. Many times, intra-day or weekly rotation from one sector to another left many traders frustrated with the entire tape. We shall see what 2022 will bring, but be sure that here at Eclubtrading we will try to guide you as well as possible.

The last trading week of 2021 has been tricky. After an impressive rally from the lows of December we stalled in the last few trading sessions and several stocks broke below key support levels. Our portfolio took some paper cuts but we tried to navigate the tape as well as possible and stayed the course. For now, the path of least resistance is still to the upside. With the $SPY and $QQQ defending their 8EMA we are looking to see if we can have a New Year rally for this week as seasonality is in the bulls’ favor.

Omicron continues to spread extremely fast putting pressure on re-opening names as many flights are still being cancelled or delayed due to staff shortages. At some point, we believe that Omicron may lead to the end of the pandemic as more people catch the virus and therefore become immune. Given the low hospitalization and death numbers occurring from this variant, we believe that an Omicron peak, scheduled for the end of January in the US may lead to a rally for most re-opening names.

Over the weekend, the main news were the monthly deliveries of EV cars, with $NIO, $LI, $XPEV and $TSLA posting impressive numbers.

Our main focus for today will be on the main indices, $SPY and $QQQ to see if they can commence a new active sequence after last week’s consolidation phase. We will particularly watch the weekly lows  to see if the bears have any strength to push below them. In such a case, we are happy to get out of the way and wait for better set-ups. For today’s column, we will look at 3 stocks: $AAPL, $AMZN and $TSLA.

$SPY chart

The overall market consolidated the December rally in the last week of 2021. The moving averages caught up with the price action. For today, $474.67 is the line in the sand for the active bulls to defend. The 8EMA is at $473.16 if we have a new push lower. For better action, see how we handle $477-478 before the all time high at $479. The new inflows will be important to gauge as they offer a good reference point for how January will play out.


$QQQ chart

The tech sector has been lagging the overall market in the past few sessions as several names within this ETF lost upper support. $AMZN, $FB, $MSFT and $GOOGL have been weaker throughout the week together with the semiconductor stocks $AMD and $NVDA. For today, $397.34 needs to hold in order for the bulls to be able to commence a new active sequence. A move above 400 will bring back some lost momentum.


$AAPL chart

$AAPL is one of the few tech stocks still above the moving averages and close to its all time high. We are long the stock going into today’s action and will look to trim into strength before buying more as the tape has been choppy lately. $177 is the first active support. For better action, see if it can close above $180 for a move to a new all time high later in the week. Keep in mind that a close above $183 will make $AAPL’s market capitalization bigger than $3 trillion.


$AMZN chart

$AMZN has been battered and bruised in 2021 and lagged the overall tech sector. On Friday, it closed once again below all moving averages, showing lots of relative weakness. We still believe that this stock may be a big winner for 2022 but make sure to have an entry plan. For ourselves, we will look at a move above $3350 its 200EMA before committing new capital to this stock. We continue to hold some $3500 calls for this Friday in case it has a fast move this week.


$TSLA chart

$TSLA continued to drift lower last week despite Elon Musk’s announcement that he has finished selling his portion of shares. It is still holding above its moving averages, a sign that it has not lost momentum yet. Over the weekend it announced strong delivery numbers for the quarter and year which should provide a good catalyst for this week. We are long some $1100 calls for this Friday should it catch a bid. For today, $1055 is active support with $1082 the first resistance area. In case it has a strong Day 1 type of move, $1119 is the main resistance of the past week.


Futures are up this morning across the board. See if early strength builds from the opening bell or if the bears can push the prices lower again as they did throughout last week. We still have a few weeks left until the next important catalyst, the earnings season. We remain bullish on the overall market as long as the bulls manage to defend the moving averages, but stock picking remains difficult given the wide ranges from last week. Many stocks are once again below the exponential moving averages, therefore losing some momentum. Make sure to wait for a correct set-up before entering a trade, and use stop losses if you want to try out some strong names against a 30 minute low. Our Daily Video is a good starting point for your trading day (live on our Twitter account – @EclubTrading1).

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