Oil is on the way to rebound. 53 dollar a barrel is insane. they need 35 to breakeven when we calculated last summer. on the other hand, everyone knows at the trading desks that 50 is a psychologically important number. when a security hits 50 or 100 dollar level its is less likely to drop below. not a rule of law but this phenomenon is so prevalent there is name...
Overbought tech stocks can retrace NASDAQ up to this level. However, securities like FB, AMZN will be a great buy before their mammoth earning this quarter. So, if we get a predictable retracement like this, these securities will be a great buy.
Stocks that plunged for the virus will rally for a vaccine. Stocks that went up because of the virus, will go down because of the vaccine. The stock market works in a very simple mechanism. There is no secret, no surprise whatsoever. Why people don't get that?
There are three main forces working in the market : Liquidity (cash), Virus (Work from home), Vaccine...
CoronaVirus vaccine approval will be the most explosive event ever happened on the planet. Anyone who tells you otherwise is a stupid or a liar, if not both.
The best investment strategy now is to create a strategy around the vaccine development. That doesn't mean to buy biotechnology stocks. Simply put -
Stocks that plunged because of the Virus will rally...
1. Dark Cloud is over - Earning is out, burning is out. Negative earning for sure, but the price rallied. No more severe negative news is expected.
2. Short Squeeze - A lot of short sellers expected something really bad. Now they have to close down their positions. That means they wil lhave to buy.
3. A stimulus package might be one the way for...
Moderna and other leading vaccine companies will now fall. It is because of the over-reactive nature of the investors. Most of them don't know a damn about virology. They buy when there is a result in panic and pushes things up. And when there is not external stimulus, they stop buying or start selling. This happened before when moderna came up with the vaccine...
- Petroleum & Coal industries have reported growth in July 2020.
- Long term debt to equity ratio is in the lower spectrum.
- Diversified business makes it more sustainable in this difficult time.
- EPS expectation is very high for next year
- MACD line is rising above the signal line.
- Retraced down to Fibonacci level 61.7%...
Amazon can fall upto 2550. I can not purchase when I get a signal like this!
However, if it hits around 2500 and starts to rebound while hitting the lower bollinger bands, it will be the best time to buy Amazon.
1. In june, S&P went above 200 day moving average
2. Current drop is approaching at 61.8% fibonacci level soon.
3. We have bollinger bands lower band sitting around that level.
4. June the 4th timing is also set around that level.
1. Market can go up in early July.
2. Read reports on 1 July & place orders if everything seems well.