A Strong Trend & Investment Opportunity Any Investor Should Be Watching

Change from analog to digital transactions has been rapid in the last decade and COVID-19 only accelerated this move.

One company profiting heavily from this transition is Visa (NYSE: V). They already have a massive customer base, which means they will automatically be part of the accelerated growth (and revenue) in the move from cash to digital. And the proof is in the pudding.

In the last 10 years, Visa stock price has increased by a mind-blowing +1000%. In the last 3 years alone, Visa has reported a profit margin of close to 50% which means that for every dollar of sales generated, the company has a net income of $0.50!

Compared to money-making machines like Apple or Google, they both ‘only’ have a profit margin of roughly 20%, it’s not hard to see why Visa’s stock has been skyrocketing for years on end.

A lot must go wrong for a company like Visa to get in trouble. Thus, for investors looking for stable growth over time, we think that a stock like Visa would make a good addition to a long-term portfolio.

Oh and we forgot to mention, Visa sports a respectable dividend of .51%.

Technical Analysis

visa stock chart 2nd skies

Long-term trends rarely are a straight line though, and periodically, stronger pullbacks are to be expected. Investors looking to start building a long position in Visa thus likely do best in being patient and wait for a solid correction in the stock.

Based on the long-term price action, we think the key support zone between $210 – $220 is a really good price range to look for potential buying opportunities with more aggressive traders looking for a price in the low $240’s.

Option Positioning

Currently there are about 325K calls and 252K puts in the option market universe, so call heavy. The largest delta strike is not till Jan 2022, and is above the current price, which favors a solid outlook for the rest of the year.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in V, but he does have pending limit orders on V. 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.

Tesla or General Motors, Which One Should You Buy?

Take a close look at the chart below. These lines represent the 2021 stock price of two major car manufacturers, Tesla & General Motors.

GM Tesla Chart 2ndskies

One is up 25.86% (orange price line) on the year, while the other is up +2.47% (blue price line). If you had to guess, which is Tesla and which is General Motors?

If you guessed that the orange price is Tesla, you guessed wrong. It’s General Motors (NYSE: GM), and there’s a clear reason that the market is betting on GM’s future.

For many years, Tesla has been the innovation and market leader in the electric vehicle space. However, competition has not been sleeping. Whilst Tesla has been enjoying its time in the spotlight, major car manufacturers have not been idle. Companies like General Motors have been quietly crafting long-term plans to become major players in the EV market. They are now starting to execute these plans in an aggressive way.

General Motors

The company has announced plans on investing $35 billion on electric and autonomous vehicle through 2025. That’s a 75% increase compared to its initial investment plans announced prior to the pandemic. This is in an effort to become an all-electric vehicle company by 2035.

With 2 EV’s on the road already, and a commitment to provide 30 new global electric vehicles by 2025 (yes, you read that right), its obvious that GM’s plans are super aggressive. This should make any competitor nervous.

GM is also more profitable than Tesla. With a net income of $6.43 billion in 2020 (5.25% profit margin) compared to Tesla’s $690 million (2.19% profit margin), GM has the bigger financial ‘muscle’ in the tug of war for market share in upcoming years.

Now, which one should you invest in, Tesla or General Motors?

Based on the strong foundation and aggressive growth plans of General Motors, we think General Motors makes for a better long-term investment for those looking to add exposure to the fast-growing EV market.

Technical Analysis

Looking at the weekly chart of General Motors (NYSE: GM) below, one thing that stands out is the long-term resistance zone. This is initiated by the all-time-high in 2017, followed by multiple rejections. It took bulls 4 years to clear this resistance zone. That happened on very strong volume in January this year.

GM Chart 2ndskies

The most recent price action shows a potential topping formation, and overall slowdown in the bull trend that started in March 2020. This suggests potential further downside in the stock over the next months.

The cleared long-term resistance has yet not been re-tested. If price can pull all the way back this support zone around $44.50-$46.70, we think this area has a high probability to act as a key support zone and a good price range for investors to look for opportunities.

Options Positioning

Currently GM has about 800K calls and 581K puts, so overall call/long heavy. Option positioning suggests support should come in around $50, which is close to our buy area, hence supportive.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in GM, but he does have pending limit orders on GM. 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 Airbnb?

While the Delta variant is making new ground, people are still traveling (or looking to travel). The key thing is, they’re not looking to stay at hotels. I’m sure you’ve already started thinking about which stocks that could benefit from this. This includes which ones you’d like to add to your long-term investment portfolio.

Airbnb (Nasdaq: ABNB) is one of those stocks. They are very well positioned for a strong rebound post-Covid.

Airbnb is the world’s biggest ‘anti-hotel’ travel company. With more than 7 million listings in 100,000 cities worldwide in 2021, it has a market cap bigger than Hilton and Marriot combined.

Impact of the Pandemic on Airbnb

Before covid-19, Airbnb grew aggressively. It experienced 38% revenue growth between 2017 and 2018, and 30% between 2018 and 2019. Even though the pandemic hit hard in 2020, Airbnb only saw their revenue decline by 27%. This is not that bad, compared to what other companies in the travel industry experienced. This is because Airbnb does not own the 7 million listings mentioned.

It’s the hosts using the Airbnb platform who are the ones carrying all the costs. This means Airbnb can keep costs to a minimum when market conditions are weak, and quickly scale up when market conditions improve. This has protected the company from the worst impact of the pandemic.

Now, after a long period of travel restrictions and lockdowns, there is pent-up demand for travel. The numbers have already started to reflect this. Airbnb’s revenue for Q1 this year is 6% higher, compared to the same quarter two years ago. That’s before the pandemic even hit. This is a strong ‘tell’, that unless something unexpected happens, Airbnb should be in for a record-breaking year revenue-wise.

Technical Analysis

Airbnb technical analysis 2ndskies

 

For now the positive developments on travel restrictions, lockdowns and vaccines have yet to be reflected in the price action of the stock, which is at break even for 2021.

This means it’s now a good opportunity to make a move, before the stock’s price starts to reflect the uptick in travel and accommodation bookings seen in many areas of the world such as Europe and US.

The stock is currently trading in a corrective structure. It’s right above a support zone between $121.50 and $132. We think this is a good location to look for potential opportunities for a long position.

Option Positioning

Currently there are about 267K calls and 275 puts, so option traders are slightly put heavy. About 25% of those options are rolling off this Friday, which should relieve some downside pressure on the stock.

Overall, the support zone below is looking like a strong location for a potential buy and add to your long term investment portfolio.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in ABNB, but he does have pending limit orders on ABNB. 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.

Has the Pandemic Created A Telemedicine Bubble?

Are telemedicine stocks here to stay, or going away?

Telemedicine experienced strong growth leading up to 2020. Covid-19 gave the sector afterburners. Telemedicine companies saw their stock price multiply many times over from the start of the pandemic.

Now vaccines are rolling out and restrictions are being lifted. It’s worth asking if telemedicine companies will continue to grow at the same pace, or if it’s a bubble about to pop.

I think it’s a mix of both. Let me explain why.

Prior to the pandemic, the global telehealth market was already growing 19% on a year-on-year basis. Forecasts expected growth to be even faster in the years to come. The estimated virtual care market in the US alone is $250 billion.

Technologically advanced countries like Finland and Sweden have also been using telemedicine apps and services for many years. It’s a disruptive service and technology that is happening globally.

(source: statista.com)

Telemedicine is used for simple tasks. This includes asking a medical professional for advice, or getting a new drug prescription.

To put this into perspective, imagine you need a new prescription. Generally you need to visit the doctor’s office to do this, which means travel to/from the doctor’s office for 30-60 minutes, plus an additional 30 minutes in the waiting room. Or you could just pick up your phone from the comfort of your own home, have a 5-minute video-call with your doctor, and get the prescription.

I think we all would prefer the latter. This goes to show why the growth forecast shared above isn’t unrealistic in my opinion.

Teladoc (NYSE: TDOC) is pushing to become a ‘whole person care’ service, primarily focusing on providing virtual primary care. This is something they want to achieve via “Primary 360”.

One example of a service included in this program is the growing ‘hospital at home’ space. This extends patient monitoring post discharge from the hospital. A device continuously monitors the patients’ vitals and sends the information directly to the hospital.

Most companies only focus on the product/service right in front of them, whilst Teladoc looks way beyond this.

We think Teladoc has a bright future. It’s an ideal candidate for investors looking to add telehealth to their portfolio.

Technical Analysis

TDOC technical analysis 2ndskies

Since the all-time-high of $308 in mid-February this year Teledoc (NYSE: TDOC) has declined 50% (at the time of writing). Looking at the price action, there is likely more downside to come.

As you can see in the chart above, the periods of selling are strong whilst the consolidations/pullbacks are very weak. From a price action perspective this is highly indicative of the order flow in this stock still being heavily skewed towards the sell-side.

Therefore, we do not think that Teledoc is a good buy at the current price. This is unless we see a strong short-term reversal in the price action from bearish to bullish, which for now clearly isn’t the case.

If the stock continuous to slide, there is a strong area of support waiting between $86 and $107. We think this makes for a potential area for long-term investors to investigate.

Option Positioning

Currently the market is put heavy. There are 200K puts vs 150K calls. ST we think resistance comes in around $155 with support levels coming in between $86-$107.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in TDOC, but he does have pending limit orders on TDOC. 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 Growth Stock Looks Like A Strong Buy

A Sector Looking For Disruption

The company we’re going to talk about is highly disruptive in a sector that for years has been governed by massively slow, expensive and bureaucratic companies.

But this is about to change as new technology finally has been introduced into the fray. Read more

Why You Need To Be Invested In This Industry

This is likely to be an industry of the future

If you do not have long-term investments in this industry yet, you might want to take a closer look. The industry I’m talking about is the plant-based food sector which according to Credit Suisse is expected to increase by 100% by 2050, becoming a $1.4 trillion market.

Read more

If You Don’t Have Stocks In This Sector, You’re Missing out

There are many sectors that have had outperformance this year. Examples are energy, tech and home improvement stocks.

One sector you should seriously consider exposure to in your investing portfolio is ecommerce. Not only is the sector growing at a rapid pace, but the business model of many of the companies makes them very resilient as they quickly can adapt their organization to changing market conditions.

One big player in this sector is ETSY (Nasdaq: ETSY). If you’ve been living under a rock and haven’t heard of ETSY yet, ETSY is an ecommerce platform where ordinary people like you and me can sell handmade or vintage items and craft supplies.

Even before the start of the pandemic, ecommerce was on the rise. But the pandemic was like pouring gasoline on a fire that has catapulted the sector to new highs at a phenomenal growth rate.

In the US alone, ecommerce sales reached a massive $196.66 billion, which equals a 39% year-on-year growth compared to Q1 2020

(source: U.S. Department of Commerce data)

The growth is not limited to US and global ecommerce traffic has been in a steady uptrend for many years, with an impressive increase of 58.33% since January 2019 alone.

Obviously, the growth of ecommerce has had an incredibly positive impact on Etsy’s business as well.

Since the start of the pandemic, ETSY has seen a strong inflow of new buyers which is great news for the company. Between Q1 2020 and Q1 2021, new buyers increased by 114%, active buyers by 90.5%, repeat buyers by 114% and habitual buyers 205%. The statistics of repeated buyers and habitual buyers is particularly impressive as those numbers are a strong reflection of customer satisfaction.

(source:)

With other words, ETSY customers are more than happy to come back often to make new purchases. New sales are good, recurring sales are GREAT as that ensures a consistent cash flow for the company.

Not only does the number of buyers go up, but so does the number of sellers with an impressive 70% year-over-year growth between Q1 2020 and Q1 2021, ensuring a strong influx of new products to Etsy’s platform, which in turn likely will generate even more sales long-term.

(source:)

Thus, from a fundamental and sentiment standpoint, we think that ETSY is in a strong position to take further advantage of the growth in the ecommerce sector, making it a strong candidate for investors looking for long-term investment opportunities.

Technical Analysis

Etsy technical analysis 2ndskies

On the 28th of June ETSY shares rose sharply on news that the company was acquiring the “Brazilian version of Etsy” knows as Elo7 for $217 million.

This bullish impulsive move in the price action cleared a key resistance that had held for more than a month changing the short-term bias to a more bullish stance. The pullback since the surge is slower than the buying preceding it, indicating that the order flow is imbalanced to the buy side.

Based on this price action, we think the support zone between $172 and $179 is a logical area to look for potential entry locations.

Option Positioning

Looking at option positioning, ETSY has about 90K calls and 100K puts with 34% of those options rolling off this Friday. This would suggest a short term pullback and potential resistance around $200, which aligns with the current price action and technical analysis.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in Etsy, but he does have pending buy limit orders on ETSY. If you’d like to learn more about Chris’s trades/positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

3 Dividend Stocks to Buy With 4% Yield Or Higher

These high yielding stocks can grow your dividend income massively.

Buying stocks just for the high dividend yields is never a good strategy by itself.

But…if you can find a high yielding dividend stock with good technical support and favorable option trades, they can help your investment portfolio while potentially providing good capital appreciation.

Below are three great dividend stocks with yields from 4% or higher to consider buying right now.

Read more

Why Space Stock ($SPCE) Fell 15% Today

Did Branson ground his stock?

What Happened?

After a successful first flight into space, Branson’s Virgin Galactic (Nasdaq: SPCE) is down almost 15% on Monday as of 2:00 p.m. EDT.

Why Space Stock ($SPCE) Fell 15% Today

On July 11th, the space tourism company helped push forward the commercial space industry taking a full crew up to space, including the well know business magnate Richard Branson.

One would think stock traders and investors would be bullish on the news, so why did $SPCE fall almost 15% today?

Read more