Tremendous Tesla Trade
Hello 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 price action of the market lately has taken on a tone of “oh no, not again”, it’s all about the meme stocks, Reddit, and Wall Street Bets. A handful of highly shorted and cult-like stocks have sucked the oxygen out of the floor of the NYSE as AMC Entertainment (AMC), GameStop (GME), Bed, Bath & Beyond (BBBY), Koss (KOSS), PetMed Express (PETS) and Blackberry (BB) stole all the thunder from just about any other pertinent news as they all gapped sharply higher on manic buying of shares and call options.
When the feeding fest of Reddit stocks becomes all the short-term rage, it throws a wet blanket on any semblance of market continuity. And this comes on the heels of the wild ride cryptocurrency investors are experiencing this past month. I feel like I’m dealing with a three-ring circus, where the center ring is where the amazing acrobats perform and the other two smaller rings are where the scary and hairy sideshows are going on.
What is evident is that millions of novice trading accounts were opened during the pandemic, and it will take many more washouts to quell this power of social crowd trading that dominates the meme stocks and cryptocurrencies. These are more than short-term fads, and the money that’s being made and lost is huge, but there seems to be no limit of liquidity to slow the pace of trading or massive swings in pricing.
At the same time, all this entertainment trading accounts for very little of the total capital that is actually traded every day, and yet the massive price movements are too big to ignore. The financial media won’t let us alone long enough to steer our focus and trading on more serious companies with real fundamentals. And so it goes.
CURRENT TRADING LANDSCAPE
Many leading stocks that are heavily weighted in the major indexes are consolidating, working off overbought conditions from the most recent move higher by SPY to the high end of the current range. The market and traders have to contend with possible Fed tapering, big spending programs, future tax hikes, and inflation.
The $SPY continues to trade in the range between $410 and $425. The technology stocks and reflationary stocks fluctuated between gains and losses.
The $DXY is reaching oversold levels and due for a rebound. The $TLT continues to trade higher.
Short term the $SPY key support level is at $403-$410. The SPY overhead resistance is at $423. Even if the $SPY is able to trade above the $423 level, the market can only make incremental highs.
I would consider rebalancing the portfolio at this point to be more market-neutral. I expect the second wave of the sell-off to restart as early as this week or next.
Based on our models, the $SPY can pull back 10-15% from the all=time highs in the next 2-6 weeks. If you are trading options consider selling premium with September and October expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $417 level using SPY and the "SELL" signal is at $424 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $388 and $425 for the next 2-4 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 orders. 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 86% accuracy in my live trading since inception. Sometimes we hold positions for 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. The green color should be interpreted as a bullish signal and the 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 you’re 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.
SECTOR SPOTLIGHT
Amid the rally in the blue-chips, Dow and S&P, the market of 2020 that featured the high-beta stocks is groping for a bottom. The wildly popular ARK Funds, overseen by Cathy Woods, raised over $50 billion in assets last year, posting stellar gains of 140% for the calendar 2020 year, led by a phenomenal runup in shares of Tesla Inc. (TSLA).
But like all Roman candles, they eventually fizzle out, at least temporarily, while the fundamentals catch up with the lofty valuations of the underlying stocks. Such is the case with the ARK ETFs. They will once again catch fire but have more wood to chop over the near term before the high-beta hotties put together another major move.
A look at the 3-year chart of the flagship ARK Innovation ETF (ARKK) shows that though the shares are down, but not out. Following a 60% correction off the all-time high, ARKK shares found a high-volume bid at $100, clearing its 50-week moving average, a key long-term technical trend line.
Whether this minor bounce will hold, build on itself, or fail, is totally up for debate by the chartists. Thankfully, we have the power of AI tools to signal to traders if and when it’s OK to get long on ARKK or short the bounce. Shares of ARKK are easy to borrow for shorting and the options chain is very liquid with tight spreads. The wild card for ARKK is that there have been a number of changes in the fund’s composition.
The recent price movement suggests a minor retest of the $100 level is in store for ARKK. A successful retest will open the way for a move back to $120, and who wouldn’t want to be in on that move? Thankfully, our AI platform will be providing the green light when to act, or not to act.
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. Identifying how best to play the volatility trade is what creates opportunity in the next week or two. The market doesn’t have to completely break down in order to profit from it. It just needs to trade in a wider range or take SPY down more than 5%. Both scenarios are probable as is being predicted by our AI models.
TRADE OF THE WEEK
The top holding within the ARKK Funds is Tesla Inc. (TSLA), occupying 10.25% of total assets. As the foremost EV company in the world, headed by Elon Musk, the company was the biggest story of the stock market in 2020. TSLA shares rallied from $75 to $700 over the 2020 calendar year, vaulting scores of investors into millionaire status while turning Cathy Wood into a Wall Street rock star.
2021 started just as hot for Tesla as it ended in 2020. Its shares rose from $700 to $900 on enormous optimism about sales projections in China and the unveiling of its EV Cybertruck with its radical design. One thing about Tesla, it has a big head start on the EV industry with its leading battery technology, mileage range, and autonomous driving features. These features and others are why Woods and other fund managers are so high on the stock’s prospects with price targets up to $5,000 being touted.
But when one survey’s the analyst community, the 25 firms that cover Tesla are more sanguine about the sizzle surrounding the Tesla story. Competition in the EV market is heating up very fast and pricing pressures are sure to become a negative factor for profit margins and earnings growth for Tesla.
When we apply our proprietary AI Forecast Toolbox to TSLA, our platform gives the stock an “A” Model Grade rating and a Predicted Resistance price of $731, or roughly $120 higher than where the stock currently trades.
The YTD chart below shows TSLA bumping along its 200-day moving average, where any bullish headline will ignite a new move higher off this key trendline. Tesla stock is a barometer and bellwether of sorts for the high-beta stock sector where many high P/E or no P/E stocks key off how TSLA trades. The stock is off 33% from its high and would be considered a garden variety correction after such a monster rally if it weren’t for the passion being exuded by both bulls and bears on Tesla.
Let’s just say there is a great level of invested interest in seeing this stock work out to the upside and the shorts have learned that the hard way for over a year now.
Assuming our AI model is correct, the current entry point for TSLA looks very timely, especially with the Cybertruck set to be ready for delivery toward the end of this year. I fully appreciate Wall Street’s skepticism about the valuation, but it has proved painful to bet against Elon Musk, and I don’t think much has changed. And I love the high rating our AI model is throwing off for the stock.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like SH. By being a member of Weekly Power Trader, it’s these kinds of opportunities that our tailor algorithms provide our members to look forward to every day they put their risk capital to work on both long and short positions.
Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are green-lighted by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested as well.
Through the Weekly Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.
The beauty of our AI-driven system is that we are always equipped to bring new trades to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.
We really pride ourselves on this kind of discovery process, to bring trades with very high probability risk/reward parameters to members throughout each week. Our track record speaks for itself from a standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
Our services delivered profitable trade opportunities for most of May for Weekly Power Trader members. Considering the mid-month market pull-back this short-term performance is what makes our hard work so gratifying. We’re ringing the register all the time and this is why serious traders don’t trade without market-proven AI tools.
The consistent performance of our services is just incredible. Our 2021 YTD stellar performance is made possible by being right on 86.37% of all trades with an average profit of 36.22% per trade. To my knowledge, my trading performance is one-of-a-kind that stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.
Once you’ve become a member of any of our services, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived in the event that they need to be viewed at a later time.
Traders seeking the most-timely directional trading strategies where over 86% of all trades are profitable should take action and come alongside the Yellow Tunnel community and make one of our timely services your go-to AI trading platform for no-excuses performance.
Our AI platform crunches all the data, generating a constant stream of trades with the highest probability of generating incredibly profitable returns available to the beginning, retail, and professional traders anywhere in the marketplace today.
Go to our website at www.yellowtunnel.com and make one of our services your default trading system where the AI that powers my all-world, always thinking platform and make 2021 the best year on record for your trading portfolio.