Surprising EV Super Stock
Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness and trading profits.
The back-and-forth, tug-of-war between growth and value stocks is being won by the value camp, at least for now. Fund managers want to show increased exposure to cyclical stocks at the end of the first quarter next week when they post their portfolio holdings. Window-dressing is always going to have some effect on the market landscape, and this time around is no different.
Traders are looking for what the next catalyst is going to be for stocks, and it could well be some pre-earnings season upgrades and increases in price targets. That and an infrastructure bill that is rumored to be as big as $3 trillion is making the rounds. Critics are calling the package a “Trojan horse” of widespread taxation and financing of Green New Deal initiatives that will be unveiled as the proposal moves through Congress.
There will surely be a huge debate over the scope and scale of this giant package, but what the market really cares about most of all is making sure bond yields don’t spike, the dollar doesn’t rally too much and first-quarter earnings season. To this end, it should be a bullish trading environment to profit from.
CURRENT TRADING LANDSCAPE
It’s been a very choppy week with some external news making for an unsettled trading landscape. The joint virtual testimony from Treasury Secretary Janet Yellen and Fed Chair Jerome Powell didn’t produce any great change to the current dovish narrative and bond yields held steady after a big week of Treasury auctions that saw soft demand for the $62 billion 7-yr Note.
The SPY was able to stage an impressive rebound and closed above the key level at $387. Reflationary stocks led the rebound and the growth stocks retested March lows. Short-term, the SPY range remains between $387 and $400.
The SPY is close to the end of the sell off and can incrementally trade below the $387 level this week. The growth stocks are close to the bottom and should rebound in the next few sessions. The DXY is losing its momentum. The TLT continues to rebound.
The bottoming process is almost done and the worse part of the sell-off is now behind us. The market will finish the bottoming process in the next two weeks and will resume bullish momentum by the end of March-early April.
I would be a buyer using any short-term corrections, and use dollar-cost averaging strategy to accumulate positions. If you are trading options consider selling premium with May and June expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $380 level using SPY and "SELL" signal is at $391 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $385 and $400 for the next 2 weeks.
NEW WEEKLY DYNAMIC POWER TRADER SERVICE
We recently launched our new Dynamic Power Trader service that we at Yellow Tunnel are very excited about. Each week, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
What makes this new service so special is that it offers real-time alerts via SMS and access to Vlad's live positions and order. When I put together this system, I wanted to be in the fight with other investors. That’s why I don’t play on your emotions to sell newsletters - I put my money where my mouth is.
Every trade recommendation that I make using this system – comes straight from the list of trade recommendations I use myself.
Not only that, but every trade I make is logged in detail for you to review at any time. You can see my entire trading history, updated LIVE so that you can see, learn from, and even copy my trading strategy.
Our Weekly Power Trader service continues to power up great trading profits. Each week on Sunday, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop as 2% of the stock price.
Signals have averaged over 75% accuracy in my live trading since inception. Sometimes we hold position 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. Green color should be interpreted as a bullish signal and Red color as a bearish signal.
How To Use Our Signals
Once you become a member, I encourage you to review our Live Trading Room recordings to see how I trade Aggressive Power Trader signals in my account. A snapshot of how we produce our Live Trading Room Sessions shows how we pack in a lot of information that can be accessed from whatever device your driving.
As a reminder, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room, I usually hold a position for 1-2 days.
I allocate less than 5% of my portfolio if the position is being held overnight. On average, less than 1% of the portfolio should be at risk, if you own a position for less than one day.
I enter a position at the predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of stock price. I target 75% accuracy using these signals.
Few subscribers asked about Options trading using the signals provided. Please review live trading room recordings. I often sell OTM credit put spread using weekly options and collect 0.5% using stock price. For example, if the stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.
While reinflation stocks are the focus of traders’ attention as well as that of the financial media, the correction in the tech sector is presenting traders with some highly attractive opportunities with some sub-sectors trading at good discounts.
One of them is the 5G space, where business momentum is only picking up speed and will continue to do so for all of 2021 and into 2022. 5G deployment is aggressively underway by all the major carriers both in the U.S. and abroad.
The 5G revolution comes in many forms – network equipment, semiconductors, software, testing and diagnostic software, hardware phones and computers and antennas. Its massive and total spending is forecast at $60 billion this year.
Fortunately, traders can cast a net over the hottest 5G stocks within the Defiance 5G Next Gen Connectivity ETF (FIVG) as a liquid vehicle with an active options chain. It’s top ten holdings are featured companies in the midst of the 5G buildout and where top and bottom-line growth rates are accelerating.
At Weekly Power Trader, we apply our custom proprietary AI algorithms to every trade, giving us a serious edge on how and when to trade stocks and ETFs.
When we apply our Forecast Toolbox to FIVG shares, we get a bullish read for the stock trading from its current price of $35 to new highs with a target price of $40.16. That’s impressive for a short-term forecast and one that we’ll consider adding to our daily trade recommendations for Weekly Power Trader subscribers.
Shares of FIVG offer traders a lower-risk method by which to trade a sector that has real staying power. Trading the ETF removes single stock risk and yet XLF has demonstrated it has strong price action that makes for an exciting trading vehicle.
TRADE OF THE WEEK
The top holding of FIVG is NXP Semiconductors N.V. (NXPI), and for good reason. The company is a leading supplier to the 5G market. Just last September NXPI opened a new state-of-the-art gallium nitrate 5G chip plant in Arizona. The facility in the city of Chandler will make radio chips for 5G wireless data equipment.
The material is a key ingredient in 5G networks because it can handle the high frequencies used in the networks while consuming less power and taking up less space than other chip materials. NXPI is one of three companies that dominate this space – Skyworks Solutions Inc. SKWS) and Qorvo Inc. (QRVO) being the other two.
NXPI is also one of the three largest chipmakers for the auto industry, Texas Instruments Inc. (TXN) and Samsung being the others. The ramp-up of the electric vehicle market is a huge tailwind for NXPI as the average EV is produced with about 3,500 semiconductors. The fact that NXPI addresses both burgeoning markets with secular bullish trends makes for a strong case for the stock price to gain significantly.
On a short-term basis, our AI-driven Seasonal Chart has NXPI in a position to make a bullish move higher over the three weeks. The stock is setting up for a climax move higher right into its first-quarter earnings report due out in early May, making for a prime candidate for Weekly Power Trader subscribers.