Will This Company Be Able To Benefit From The Global Clean Energy Hype?

With the US, Asia and Europe making serious efforts to quickly move towards a carbon-neutral future, many companies around the globe are fighting to grab a piece of the fast growing clean-energy market.

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One of these companies is Plug Power (Nasdaq: PLUG) which focuses on alternative energy technology such as hydrogen and fuel cell systems.

The company is a big player in the field and the global market leader looking at market capitalization.

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(Source: Statista)

The bull thesis for Plug Power is very similar to that of most clean-energy companies which is the clear shift away from combustible-engine vehicles globally, a trend that is accelerating and likely wont slow down anytime soon.

Plug Power also has presented a bunch of good news recently, such as a $1.6 billion investment from SK group, raising over $2 billion in a bought-deal offering, a joint-venture with Renault, and more.

However, it’s important to note that the clean energy and EV stock company does still face significant risks, something that potential investors need to be aware of:

1) Profit – The company has been burning cash for more than two decades and presented a $99.6 million loss in its Q2 earnings report. The company yet must present how it plans to how it’s products can be sold profitably in the near future.

2) Adoption – Whilst hydrogen is an environmentally friendly fuel, it does have multiple downsides compared to other energy sources which has limited the adoption so far, a trend that might persist. To mention a few, hydrogen production is very expensive, storage and transportation can be dangerous and it’s still dependent upon fossil fuels such as natural gas.

In conclusion, we think that PLUG is a very attractive investment if all of the company’s plans come to fruition and global adoption can pick up thanks to the strong push globally towards clean energy. But for now, due to the risks mentioned above, we think investing in this stock is reserved for aggressive investors with a high level of conviction only.

If you’re a conservative investor and prefer to quantify the risk on your investments, Plug Power likely isn’t the stock for you.

Technical Analysis

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The stock of PLUG took a heavy beating early this year, losing up to 75% of it’s value within a couple of months. Since, the stock has recovered slightly and is down 65% YTD.

Price did find solid support between $18.5-$22 from which it trading higher, a move which now is followed by a corrective pullback back towards this support zone.

We think this support zone, based on the price action, is a solid area for aggressive investors with a strong conviction in the company to look potential buy opportunities.

Option Positioning

Currently there are about 615K call and 511K puts out there in PLUG. About 60% of those options are expiring this Friday, so am expecting more headwinds for the stock. Option positioning suggests support coming in between $15-20.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in PLUG. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

This Stock Is Down -45% Despite Strong Q2 Earnings Report – Time To Buy?

Freelancing is becoming increasingly popular as more and more people realize they can use their skills to earn extra money on the side or even replace their 9-5 job.

Internet based freelancing-marketplaces such as Fiverr International (NYSE: FVRR) were early to seize the opportunity and build an entire business model around this.

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Based on recent research and statistics, 38% of 18–34-year-olds are already part of the gig economy with 44% saying that the gig economy is their primary source of income. In total, already 24% of Americans 18+ earn some form of income by working in the gig economy (Source: Edison Research).

These numbers are likely to increase further at a fast pace and Fiverr themselves said that the domestic market opportunity alone within the US is worth a staggering $100 billion in annual sales.

Now, if the company is so great, why has the stock sold off 45% from its all-time high, especially after a smashing Q2 earnings report?

We do think there are 3 main reasons for this:

  • Buying pressure was likely exhausted after the stock had put in a massive 1500+% growth in less than 12 months following the outbreak of the pandemic in March 2020. There were simply not enough buyers to sustain such a move and exhaustive moves are often followed by sharp declines, something we teach our students Trading Masterclass how to spot, prepare and benefit from scenarios like this.
  • Fiverr initially got a strong boost from the pandemic with people being locked up at home. Many simply chose to put their time in lockdown to good use to earn money via freelancing instead of watching movies or playing games. With vaccines being rolled out globally and lockdowns coming to an end, it’s only natural for people to want to spend more time outside and with friends/family instead of being confined in their home. This has temporarily affected Fiverr negatively.
  • Whilst the Q2 earnings report was great, the company lowered guidance for the rest of the year. Fiverr is affected by seasonality as is, but the pandemic further amplified this effect.

Overall, based on the company’s overall success so far, aggressive expansion model and massive growth market and growth potential, we think this sell-off in the stock offers a great opportunity to acquire Fiverr shares at a solid discount.

Technical Analysis

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Despite strong Q2 earnings, the stock price of Fiverr has fallen 45% since it’s all-time-high in February this year. Current price action suggests there might potentially more downside to come short-term.

Long-term however, price is approaching a strong area of support which we think is a good location to start acquiring a long-term position in the company.

Option Positioning

Currently there are 41K calls and 30.1K puts. While there are not a lot of option trades and volume on the stock, what is of note is 45% of those options are rolling off this Friday, which leads us to believe a pullback is in order, and then the option positioning favors gains after.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in FVRR. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is It Now Time To Invest In This Beaten-Down Stock?

With more and more focus on climate change, renewable energy stocks have gained a lot of attention in recent years, especially in 2020 with most stocks in the space soaring.

Countries around the globe are committing to limiting and reducing their carbon emissions in the upcoming decades, thus, it should be a no-brainer that renewable energy stocks likely are a good long-term investment.

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One company in this space that IPO’d in 2020 is Brookfield Renewable Corporation (NYSE: BEPC), which operates a broad range of energy projects such as hydropower (8 GW installed), solar (2,2 GW installed), wind (5,8 GW installed) and energy storage (2,7 GW installed) with $59 billion in assets currently under management.

Long-term power purchase agreements ensure stable cash-flow, which should continue to grow in the upcoming years as the company’s 27-gigawatt development pipeline come to fruition.

The stock also pays a really solid dividend close to 3%, so not only can you make a decent annual return via dividends but also via a strong directional move if you get the timing right.

The stock has taken a fair amount of beating since it’s ATH earlier this year, but following the 40% sell-off, price action is now suggesting that the stock is trying to put in a solid base and reversal pattern which should make it an interesting case for potential long-term investors.

Technical Analysis

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After selling off more than 40% from it’s all-time-high in early 2021, the stock found support between $37 and $38.50.

After printing a double bottom, price action is suggesting a potential reversal/transition from bearish to bullish. Thus, we think now is a good opportunity to start building a position in this stock on pullbacks towards $37-$38.50, alternatively on a breakout above the resistance area of $43.50-$45.50.

Option Positioning

This is not a heavy stock in terms of option trading with only 2.5K (yes, K) calls and 2.7K puts. Over half of those options are expiring on the Sep op-ex, so am expecting a pullback. Low 40’s looks like a solid support area from option positioning.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in BPCE. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

The Aerospace Giant That Just Can’t Catch A Break

The company we’re talking about is Boeing (NYSE: BA) and unless you’ve been living under a rock, you should already be aware of the bad-news-storm that started out in 2018/2019 when two of Boeing’s new flagship aircrafts, the Boeing 737 Max, were involved in fatal crashes.

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If those crashes weren’t bad enough by themselves, investigations revealed that the management of Boeing had been pushing the internal organization hard, bypassing critical safety barriers in the production of the aircraft.

Initially, Boeing had also told airlines that their pilots only needed a brief refresher training despite the aircraft having a completely new system installed, called MCAS which was the root cause of the two fatal crashes. The pilots involved in the crashes had not received any training on the MCAS system, nor were they aware that this system even existed.

With the 737 model being Boeing’s best selling aircraft type of all time, the combination of bad management decisions and results that followed, couldn’t have been worse.

As a result, aircraft deliveries crashed from 806 aircrafts delivered in 2018 to only 157 (!) in 2020.

Revenue dropped from $101 billion in 2018 to $58 billion in 2020, and net income dropped from $10.45 billion in 2018 to -$11.87 billion in 2020!

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(Source: Statista)

These are horrendous numbers for the Chicago-based manufacturer and a financial crisis for the company that even had an impact on key economic indicators in the US, slowing down the economic growth by 0.3%-0.4% due to the sheer size of the company.

If the 737 Max problems were not enough, shortly after, the pandemic hit the aviation industry with a baseball bat, reducing international travel at most airports by 90-99%, naturally leading to a slowdown in aircraft sales.

The list of bad news for Boeing can be made long, but in short, below are a few of them:

  • Boeing’s Starliner spacecraft capsule has faced major setbacks
  • The 787 Dreamliner and 777X aircraft models are facing engineering/certification issues
  • The military tanker KC-46 program has faced major delays and setbacks

And whilst Boeing is stuck in its self-inflicted battles, their main competitor Airbus keeps on stealing both market shares and customers in front of their eyes.

What is keeping the stock and company alive at this point is a backlog of more than 4000 commercial aircraft orders and billions in defense orders. But one things is for sure, Boeing must start getting things right from here on out for the company and stock being able to recover to its former glory.

In conclusion, based on all the above, we do not like Boeing at current price levels and think there is more downside to come before the stock is able to stage a strong recovery.

If you’re thinking about buying stocks in Boeing, we think it’s likely best to wait for bigger dips in the stock and/or for the fundamental headwinds of the company to turn into tailwinds.

Technical Analysis

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The stock topped out right after the second fatal aviation incident involving a Boeing 737 Max, producing a strong long-term counter-trend false break. After a brief consolidation, the stock then entered a free-fall towards the long-term support zone between $88-$120, a 80% (!) drop in a 12-month period.

Since then, the stock has recovered, but the recovery still looks weak compared to the price action preceding it. Unless we see a clear change in price action or strong positive news coming out, we do not think Boeing is a buy at any other location than the long-term support zone shown above.

Option Positioning

Currently there are about 1.4M calls and 1.15M puts with only 10% of those options rolling off this Sep op-ex. We’re not seeing solid option support till at least $195, and potentially $150.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in BA. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is It Time To Buy This Hammered Stock Approaching Support?

The Chinese regulatory crackdown that began in Q4 last year put massive bearish pressure on Chinese tech stocks, with many falling up to 60% in only a few months.

Short-term, it’s easy to understand that investors get spooked by this move from the Chinese government and policy makers due to a lack of transparency. But looking at history, this isn’t the first time, but also happened in 2011, 2015 and 2018. However, the markets recovered rather quickly, producing triple-digit percentage returns in the years to follow, potentially rendering the current event a good opportunity to go hunting for Chinese stocks.

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This brings us to one of the world’s largest retailer of present-day, Alibaba Group Holdings (NYSE: BABA) which is mostly know for the wholesale platform Alibaba.com, but the group also owns an array of other businesses such as AliExpress, Tmall, Taobao, Lazada, Youku and more (Source: Alibaba Group).

Despite the earlier crackdowns, Alibaba has been able to put in an impressive bull run since it’s IPO in 2014 (one of the biggest in history), not only in terms of the stock price, but also revenue-wise with 2015 and 2018 barely affecting the revenue graph as you can see below.

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(Revenue million Chinese ¥, Source: Statisa)

So historically, it’s not unlikely that this time won’t be any different. After all, if there’s one company that literally can afford unlimited costs when it comes to matters of compliance, it’s BABA with more than 800 million active customers, rock-solid balance sheet and monster pile of cash readily available.

Without doing a deep dive into the company financials, even if the regulatory crackdown has spooked markets short-term, history shows that Chinese tech stocks were relatively quick to recover each time.

There are no guarantees, but history tends to repeat itself and from a price action perspective, we think that BABA is starting to get into an attractive area from a structural price action perspective.

Technical Analysis

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BABA peaked around $320 in October last year, right before the regulatory crackdown, after which the stock lost more than 50% of its value.

Short-term, from a technical perspective, the stock is showing a bearish exhaustion followed by a bullish reaction which for now, looks like a mean reversion.

This bullish bounce however is not supported by strong volume which makes us believe bears might stage a comeback in recent weeks/months. If that happens, it’s likely the stock could continue to slide further down towards the long-term key support between $130-$143, an area we think makes a great location to start building a long-term position in BABA.

Option Positioning

Looking at the options open interest and volume, we see about 2.6M calls and 1.9M puts with only 9% of the options rolling off this Sep op-ex. Option support should start to materialize around $160.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in BABA. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is This EV-Manufacturer A Buy After The Recent Earnings Report?

A few years ago the Society of Automotive Engineers of China predicted that by 2035, half of China’s car fleet would be running on alternative energy.

Already today, China is the country that has the highest number of electric cars in the world whilst offering a low-cost environment for manufacturers.

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One big player in this field is the Chinese multi-national electric car manufacturer NIO Inc. (NYSE: NIO), which was founded in 2014. The company recently released their Q2 earnings (Aug 11th) backing up the above-mentioned facts with a strong increase in vehicle sales and lowered material costs, further shrinking its quarterly losses.

Close to 22k vehicles were delivered in Q2 (up 112% year-over-year), increasing quarterly revenue to $1.3 billion (up 148% year-over-year). For Q3, NIO expects to deliver between 23k-25k vehicles, generating sales of approximately $1.4 billion.

A quick look forward shows that NIO’s ES8 model soon is set to debut in Norway and the company also has announced two new EV models, one of which is a lower-priced model expected to directly compete with Tesla’s Model 3, paving the road for continued growth.

Another stable revenue driving factor is NIO’s battery-as-a-service program which not only builds stable cash flow, but also is known to increase buyers’ loyalty.

NIO’s recent numbers are showing that the company seems to be successful in following up on its ambitious growth plans and 2022 looks to be another year of strong growth for the company. Thus, long-term we have an overall bullish outlook on NIO and think it’s a solid buy on pullbacks into key support zones.

Technical Analysis

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After topping out around $64 in Q1 this year, the stock sold off 50% before finding support from which it launched higher in June/July, showing strong bullish interest between $30.7-$34.

Price is now pulling back towards this support zone which we think is a good location to start looking for potential longs in NIO.

Option Positioning

NIO currently has approximately 1.6M calls and 1.6M puts with about a third of those options rolling off this Friday. Hence, the later we go into the week, the greater the option fuel to push NIO higher rolls off.

Option positioning suggest resistance should come in around $40 which lends itself to potentially buying pullbacks next week.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in NIO. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

One Infrastructure Stock To Keep On Your Radar

With Biden’s $2 billion infrastructure bill now in the hands of the House of Representatives, we think this is a bill that is likely to pass in one form or another.

If this happens, the steel industry is without a doubt one sector that can heavily benefit from the American Jobs Plan.

One Infrastructure Stock To Keep On Your Radar 01

One of the biggest steel companies in North America is Nucor (NYSE: NUE) which we think could be a potential value play if the infrastructure bill passes.

The stock did initially peak in 2008 prior to the economic crisis that followed and operating margins from sales fell from 15% to 5-10%, a range they got stuck in for many years. However, the company did use the time wisely and invested heavily in upgrading the business.

In confluence with soaring steel prices that were up +49%/ton in Q1 2020 compared to the year prior, ultimately the Nucor’s investment paid off big time. In Q1, the company reported quarterly earnings of $937 million which was greater than all earnings reported in 2020 and Q2 came in even stronger at $1.5 billion, bumping its net income for the first half of the year to $2.4 billion (Source: Nucor).

Based on all this, it’s not hard to see why the company’s stock has sky-rocketed this year by over 130% YTD.

Also, from a long-term investing perspective, besides the strong financials and the potential of Biden’s investment bill passing, it’s also worth noting that Nucor does pay a 1.35% dividend.

Now, in terms of potential risks, something to keep in mind if you’re thinking about investing in this sector is that the steel industry is a highly cyclical industry which is doing well in economic growth times and poorly when the economy is tanking.

In conclusion, even though there is a lot to like about Nucor, we do think the stock is too expensive at current price levels. However, we do think Nucor could offer a solid value play on deeper pullbacks.

Technical Analysis

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After peaking in 2008, the stock traded sideways in a large +$50-range for almost 13 years (!) before finally breaking out to new all-time highs in May this year.

Looking at the monthly chart above, the stock currently looks very extended and strong extensions like this are often followed by an exhaustion pullback.

If this manifests, we think that the first deep support zone comes in at around $75-$83.50 (all-time-high from 2008) followed by $67-$70.

Option Positioning

Currently there are about 100K calls and 62K puts with about 15% of the options rolling off this Sep op-ex. Options positioning suggest the first support zone is coming in around $110.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in NUE. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is It Too Late To Invest In This Market-Leading CRM Company?

For starters, if you’re not familiar with CRM, it stands for customer relationship management and is a technology for managing all company relationships and interactions with existing and potential customers, which is critical for improving any business.

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The absolute market leader in this field is Salesforce (NYSE: CRM) with a 19.8% market share globally. That’s more than #’s 2-5 in terms of market share combined, and they are no slouches (Oracle, SAP, Adobe, Microsoft). In short, Salesforce is the apex predator of the CRM savannah.

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Salesforce has been growing at a rapid pace which is reflected in its stock price. Since its IPO in 2004, the stock has climbed more than 7000%, turning a $5,000 investment in 2004 into $350,000 today, even outperforming stocks like Amazon which is not an easy thing to do.

The company also heavily outperforms their competition in terms of revenue growth which is increasing by more than 20% annually, a number that keeps accelerating further.

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Another thing we like about Salesforce, besides it’s dominant market position and strong financials, is the fact that the company’s business model is evergreen.

What do we mean by that? Salesforce’s services helps business to automate repetitive tasks and optimize their organization, enabling them to cut costs and boost efficiency during tough economic times. Based on this, we think Salesforce has the potential to ‘hold the line’ even during periods when the macro-economic situation gets more challenging.

Now, with the stock trading at its all-time-high it is easy to think that it might be too late to invest at this point. However, it’s important not to forget that the company consistently has produced new all-time highs since 2004 and with the CEO Marc Benioff aiming for the company to hit $50 billion in annual sales by 2026 (up from $21 billion in 2021) we think there is still a lot of room to grow for this company.

In conclusion, we rate this stock a solid buy on pullbacks.

Technical Analysis

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With recent earnings coming in very positive (not surprising), buyers have pushed the stock up to its all-time-highs around $275 which is a key resistance.

The most structural key support area is resting around $200-$210 and we think that a pullback towards this area would be an excellent opportunity to start building a long-term position in Salesforce.

Option Positioning

Currently there are about 400K calls and 390K puts out there amongst option traders. There are about 18% of the options rolling off next Sept. op-ex, so no short term pressures on the stock. Support from an options perspective comes in around $240-250.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in CRM. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is This Travel Company Now A Buy?

Cruise lines and travel stocks were two industries that took the largest hit when the pandemic landed in early 2020,with bookings and revenue drops up to 99%!

Is This Travel Company Now A Buy 01

One company still feeling the effects, and trying to adapt to the pandemic challenges is Norwegian Cruise Line Holdings (NYSE: NCLH) which reported a $717 million loss in Q2 alone.

To give you a visualize representation of how bad things got, take a look at the 2013-2020 revenue diagram for Norwegian Cruise Line Holdings below.

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(Source: Statista)

On the bright side, the CDC has now given the green light for cruises departing from US ports again which is a clear indication that the worst might be in past for cruise line operators at this point. Obviously the delta variant can delay this, but there is some light ahead.

Another ray of sunshine is that the company’s bookings for the 2022 are already surpassing the bookings of 2019, which was a record year. Add on top of this the fact that the company also has raised cruise prices by up to 20% on new bookings, hinting that the recovery in travel, once it fully manifests, likely will be strong.

In terms of risks, we see two major risk factors for the company with new covid-19 strains emerging being one of them. The delta variant has proven to be very transmissible and it’s very hard to foresee new potential outbreaks which can have renewed negative impacts on the company’s operation and income.

Secondly, the company has taken on major debt during the pandemic (highest debt-to-equity ratio in the sector) which needs to be repaid, and this can obviously only happen if the travel industry recovers in full.

Based on all this, our overall assessment of the company and stock is we think that the recovery process for the travel industry is far from over.

Also, as traders and investors we always want to be able to quantify the risk on every trade/investment. With Norwegian Cruise Line Holdings, we feel that there is too much of an ‘unknown’ factor when it comes to the whole pandemic situation. Thus, we do not think NCLH is a buy for now, especially at current price levels (more on that in the technical analysis below).

Technical Analysis

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The stock has recently broken below a key support around $27 and price action suggest further potential downside to be around the corner.

Unless we see a strong reversal/transition from bearish to bullish, based on this price action, for now, we don’t think this stock is a buy unless we get down to the key support zone between $12.50 and $14.50 or some light exposure in the low 20’s.

Option Positioning

In terms of the option traders, we see about 700K calls and 450K puts out there in the market. The largest gamma expiry is September 17, so nothing immediately pushing/pulling this stock.

We see resistance up ahead in terms of option trades with the first layers of support coming in the low 20’s.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in NCLH. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

One Highly Profitable Company To Invest In

With increasing legalization of recreational marijuana across multiple US states, cannabis stocks had a very strong bull run in 2020, with many stocks multiplying in value many times over.

One of these companies is Trulieve Cannabis (CSE: TRUL) (OTC: TCNNF) who’s stock rallied from its all-time-low ($8) in March last year to $67 in February this year, a massive 640% increase in only 11 months.

One Highly Profitable Company To Invest In 01

However, since putting in the all-time-high, the stock started to slide and is now down almost 50% since February.

One reason contributing to this sell-off is that the CEO’s husband stands on trial for federal bribery and corruptions charges. Even though he’s not involved with the company, the market clearly has shown concerns about if the company might be negatively impacted by this.

But this has not stopped CEO Kim Rivers from ‘buying the dip’ with a big $1 million insider purchase on August 17th, increasing her stock position in the company by 4.5%, something that communicates strong confidence from the company’s management side.

In terms of the business itself, Trulieve Cannabis currently has 97 dispensaries across the US with 88 of those being in Florida and currently is in the process of acquiring MSO Harvest Health & Recreation.

This deal will give the company access to 15 more dispensaries in Arizona, further increasing the company’s reach and profits potential.

Additionally, the company also recently secured a medical cannabis license in Georgia which is a populous state and close to Florida where Trulieve has the majority of its current infrastructure.

The company is also highly profitable, reporting a net income of $40.9 million in Q2, more than double that of the year-ago quarter.

Given all this, do we think Trulieve Cannabis is a buy?

The answer is yes, but not at current price levels as the price action for now suggests there is more downside to come. In our technical analysis below, we share what we think is a good price range to potentially start accumulating shares.

Technical Analysis

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As already mentioned, the stock is down 50% since its ATH’s in February. Price is currently holding at a minor support, but price action overall looks weak/heavy, suggesting further downside mid-term unless the order flow clearly changes from bearish to bullish, something we’re not seeing yet.

Thus, if this mid-term bear trend continues lower, we think that the long-term key support between $20 to $24 can offer a great opportunity to acquire shares of this profitable company at a discount.

Option Positioning

Being a Canadian stock, we do not have options data on TRUL.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in TRUL. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.