Stocks in Play - November 22nd 2024

TLDR Stocks in Play: GOOG, ESTC, GAP, REPL

Welcome to today's Stocks in Play report. Below are the key stocks to watch, along with brief x-ray and analysis. After some getting feedback, I will introduce a loose rating system and also share my watchlist for top picks each month. (Essentially my watchlist for strongest catalysts regardless of first-day price action).

I have used Tradersync to review and journal my trades for several years now. I have gleaned eye-opening information about my trading from it; such as the hours of the day I do best, the setups that do best for me, the price of the stocks I’m best at, the days of the week etc. As part of their Black Friday Sale TraderSync are offering 65% Off Subscriptions with a 7 Day FREE Trial. I encourage readers to take advantage of the 7 Day Trial to import your trades and see what you can learn.

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1) Elastic N.V. (ESTC) (Rating: B, Multi-Day, Top Picks November 😼)

Industry Group: Packaged Software, Market Cap: $9.6b, Float: 85m, Short Interest: 3.5%, Days to Cover: 2.2, Exchange: NYSE

Catalyst: Last earnings there were high expectations that ESTC was a major AI winner, Earnings were disappointing and management were seen to be bungling the opportunity. Stock dropped 33%. So sentiment and expectation were very low last night. Modest Beat in Revs, Large Beat in EPS ($0.59 vs est. $0.38), Strong beat on FY25 EPS Guide, Slight beat on FY25 Revs Guide. Strong Operating Margins Beat. Guide implies slight acceleration of Growth. Up 28% Pre market this stock should be watched for a sustained move upward in the coming days & weeks. Stock gapped up 6% yesterday so I would be wary that it may not keep going on Day One. 5 Analyst Upgrades so far this morning.

2) The Gap Inc. (GAP) (Rating: B+, Multi-Day, Top Picks November 😼)

Industry Group: Apparel Retail, Market Cap: $8.92b, Float: 226m, Short Interest: 14.5%, Days to Cover: 6, Exchange: NYSE

Catalyst: Strong EPS Beat (0.72 vs est. $0.57) and improved Operating Margins. Slight Revs Beat, Gross Margins of 42.7%, Market Share gains on all brands, Raised Full Year Guide for Sales, GMs and Operating Income. Operating Income Guide particularly strong. Management commentary was quite bullish. Relatively high Short Interest and stock has been neglected essentially sideways for the past 12 months and on a larger time frame sideways for the past 25 years! 6 Analyst Upgrades so far this morning.

3) Alphabet Inc. (GOOG) (Rating: C+, Single-Day)

Industry Group: Internet Services, Market Cap: $2T, Float: 5.15b, Short Interest: .79%, Days to Cover: 2.2, Exchange: NASDAQ

Catalyst: GOOG have had several negative headlines most notably the DOJ recommendations that the company spin off Chrome and be forced to end their exclusivity deals for search (eg. Apple). Stock dropped 6% yesterday which is a lot considering this DOJ recommendation won’t even be decided until August 2025. On top of this The Information reported after hours last night that OpenAI are considering launching their own browser to compete (what a coincidence on timing...) I am watching GOOG for a bounce today. Ideally with a sell off near the open and recovery later in the day.

Honorable Mention to: REPL - Received Breakthrough Therapy Designation for RP1 Treatment for Advanced Melanoma. Breakthrough designation is a good catalyst in Biotech. 53m Float, 13% Short Interest, 10 Days to Cover. These clinical stage biotech’s are complex and should be traded with caution. I look at them as day trades and avoid swing positions. Read more on Breakthrough Therapy Designation.  

Market Awareness

I am hoping for a strong rally into Thanksgiving Week today. It may not happen we will see. Next week there are still some important earnings but I will be extremely selective and trading minimally. I do not expect to actively trade Wednesday or Friday as volume tends to be very low on these days with big money enjoying their Thanksgiving not at their computers pressing buttons. (Thursday market closed).

Next Week I’m Watching: ZM, ADSK, CRWD, DELL, WDAY, HPQ, NTNX, DKS, ANF (Earnings)

Sources & Services I Use in my Trading:

• Finviz - Short Interest, Float, Articles, Fundamentals (Free)

• Benzinga Pro - News Source + News Squawk + Earnings Data (Paid)

• Tradingview - Charting & Scanning (Paid)

• Koyfin - Fundamental Data (Paid)

• EarningsWhispers - Earnings Calendar (Free)

• Tradersync - Trade Journal (Paid)

_{PS: There are many ways to trade stocks in play. It does not have to be the one that keeps going straight up and sometimes it doesn’t even have to be day one of the catalyst. Everyone must find a setup, timeframe and method that works for them. This list is supposed to educate on the criteria I use and the methods in which I find Stocks in Play. Yours may differ and that is completely okay.}