Power Plays Weekly Roundup + A New Idea
October 20, 2023
By Scott Redler
In the last month, most strategists have been calling for a rally in the fourth quarter as the end of October-November seasonally is usually a better time for equities.
With rates rising and the geopolitical tensions, it seems as if that move is on pause and is in jeopardy of not happening.
Actively, traders took some risk off when the SPY pocket pivot failed around the $433 area.
The question is, do the October lows of $420 hold? Or do we see another round of selling?
Power Plays have been hard to find as the market has too many sellers but we do have one new idea:
Netflix (NFLX): For those who think this market is range bound and will hold in, Netflix is a buy in this $400 range. It needs to hold $372-$392, which is the post-earnings gap. This is a real Power Play as when a big stock gaps up and holds its gap, typically the direction of the gap is in control. This means NFLX could take out the post-earnings high of $408.95 to open the door for higher prices in the weeks ahead.
Now let's look at our remaining Power Plays names:
Advanced Micro Devices (AMD): hit a high of $111 last week but didn’t seem like enough to take off half and now it’s back toward $101. The news flow has been positive for this name as they work on new chips to battle NVDA and some other semiconductor companies. This needs to hold $89 to $94, unless you are really worried about another leg lower if rates continue higher and the war in the Middle East escalates.
Scott Redler Positions Disclosure as of 2023-10-20 at 09.26.20 AM