Driving Lower
Carvana (CVNA) is a favorite trade of the shorts, the day traders, and what I refer to as the "Penny Stock Crowd."
Price moves with CVNA tends to become extremely exaggerated with these three groups at the reigns. With all three of these groups driving CVNA’s price.
Proof: Shares of CVNA went up over 100% during the trading from November to December.
What goes up that fast is likely to come down just as fast. Let’s also remember that this company is holding their balance sheet together with Scotch Tape and bubble gum.
CVNA broke through $50 and its 20-day moving average on Tuesday. The technical traders are going to drive this stock down another 20% over the next week or two to $40. I like the aggressive short here and will be trading puts on the stock to that $40.
Here’s Your “Daily Double”
Dyne Therapeutics (DYN) announced positive initial clinical data this morning from two trials. According to the company, The Achieve trial in DM1 and Deliver trial in DMD patients are yielding positive results. These results demonstrate the promise of the company’s FORCE Platform in developing therapeutics for rare muscle diseases.
As is always the case with positive trial news in the biotech sector, shares of DYN are flying higher in premarket trading as DYN stock shows gains of 75% and more hours before the open.
Shares Are Ready to Fly
Nothing says “New Years” like a resolution to eat, sleep, and “you know what” better. Let’s face it, we’ve all made those resolutions.
If you really want to know, I’m working on losing 25 pounds before my ski trip in February (keep me to it). That’s where Hims & Hers Health (HIMS) comes in.
The telehealth company sells prescription, over-the-counter drugs and personal care products online, all focused on helping you become a better you.
Shares popped more than 10% on Tuesday, moving counter to the rest of the market. This is the result of a huge seasonal effect that I see continuing through January, so grab the stock now.
A break through $10 over the next week will grab the attention of traders as the market loves to see stocks break above this psychologically significant level.
Look for upgrades from analysts to help drive prices higher as four of the nine covering the stock have it ranked a “hold.” That’s hard to imagine on a stock that’s up 50% over the last year.
$10 is the trigger price for another 20% rally in HIMS.
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About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.