We’ve had an interesting few weeks…
- AI/tech earnings
- Midterm elections
- NVDA compromising US intelligence
There’s never a dull moment in the stock market. It’s one of the reasons I love this industry.
Plus the trade setups.
Since the midterms on November 3, volatility has returned to the market, BIG TIME.
Major indexes snapped out of their multi-month consolidations almost immediately. And even though the market fell, I’m grateful for the movement.
There’s enough grease to move the chains. And as a result, we’re seeing more volatility from individual stocks.
As options traders, we need that volatility to find solid trade setups.
Which means… my watchlist this week is full of viable plays.
There are 3 stocks I’m watching.
Stock #1: Unity Software Inc. (NYSE: U)
Unity is a software company that operates a development platform to deploy games and interactive experiences for mobile phones, PCs, and consoles.
The company’s platform offers AI solutions that support developers through the entire lifecycle: prototyping, live service operation, user acquisition, and monetization.
And despite the recent tech-sector weakness, this stock is trading near 52-week highs. The recent move came after the company’s bullish Q3 earnings report:
- Non-GAAP EPS of $0.44 beats by $0.10.
- Revenue of $622.1M (+32.1% year-over-year) beats by $54.65 million.
There’s blue sky above this stock at its current price level. A surge to new highs could push it much further, due to a lack of potential sellers.
But the opposite is true too…
If Unity rejects these new highs, sentiment could flip, and the stock could fall lower.
It’s at a crossroads. Either the stock pushes to new 52-week highs or confirms a new downtrend.
Pay attention to the intraday price action. Use support and resistance to build smart positions.
Get my trade alerts for a whole year: Just $1.
Stock #2: The Trade Desk Inc. (NASDAQ: TTD)
The Trade Desk is another software company that’s showing strength despite the recent tech-sector weakness.
The company creates, manages, and optimizes digital advertising campaigns across multiple devices, like television, streaming devices, mobile devices, computers, and digital out-of-home devices.
The stock is currently filling a gap on the chart…
The reason for this bullish price action: on November 9, the company announced Q3 revenue that beat Wall Street’s expectations.
- Non-GAAP EPS of $0.33 beats by $0.08
- Revenue of $736 million beats by $84.56 million
TTD is trading above the local highs from September. That level should act as support, but it’s running into resistance from the drop-off in August.
This is a highly volatile area on the chart. I expect some big price movements in the days ahead. Take advantage of this volatility.
Stock #3: Hims & Hers Health Inc. (NYSE: HIMS)
You’re probably familiar with this company, or at least heard of it.
I’ve noticed Hims commercials during NFL games. The company advertises hair regrowth serums and supplements for increased activity both in and out of the bedroom.
But for all its notoriety, the company just missed on Q3 earnings:
- GAAP EPS of -$0.14 misses by $0.20
- Revenue of $890.3M misses by $2.47M
As a result, the share price fell to a support level around $20 per share.
Again, we’re watching a stock at a key area.
$20 per share is psychologically significant. And there’s evidence of past support from April. It could bounce from this level or blow through it due to weak earnings.
I don’t know which way these stocks will go.
If I did, trading would be much easier.
Pay attention to the intraday price action on these stocks. We’re looking for support and resistance that could hint at future momentum.
We want to trade alongside that momentum, whether it’s up or down.
Stay Street Smart,
Jeff Zananiri
