Market primed for a breakout?  (SPY, TSLA, ABNB, PTON, more)

January 9, 2023

Market primed for a breakout?

The S&P 500 (SPY) has been stuck in a trading range since before Christmas, bouncing back and forth between SPY 378-386.

Friday’s monster rally took us above that range at the close. A follow-through above SPY 390 could set markets up for a nice squeeze higher as short sellers (and call sellers) liquidate positions.

Levels I’m watching for on Monday’s close:

390+: Convincing break out of recent range, green light for a +5-8% early year rally.

387-390: Consolidation here could add even more fuel for the next leg up.

Under 387: May indicate a stalled or failed breakout… range resumption until earnings start hitting one way or the other.

Tesla (TSLA) signs of life

Tesla’s (TSLA) move on Friday was very important.

After opening at levels dangerously close to double-digits, the stock rallied through the day to close solidly green… shaking off news of steep price cuts to their vehicle lineup in China.

We love seeing stocks rally on “bad news” after a major selloff.

We also like seeing Elon defend the company’s share price publicly, which he did this weekend in a tweet showcasing Tesla’s dominant growth among light vehicle manufacturers in 2022:

Is this the first time that TSLA’s revenue growth rate has been higher than its PE ratio?

Travel boom incoming?

China is reopening travel for its citizens after failure after failure to contain the spread of respiratory viruses (shocker).

To say that this will have an impact on travel companies would be an extraordinary understatement.

Just look at the pent-up demand for travel that must have been building for the last few years:

AirBnB (ABNB) and (BKNG) could be big beneficiaries of a travel boom in 2023.

Trouble in (psychedelic) Paradise…

Shares of Atai Life Science (ATAI) plunged by -40% late last week after the company announced that its Phase 2a trial featuring R-ketamine failed to meet its primary endpoint.

In layman’s terms: ATAI’s treatment failed to produce statistically significant results after 24 hours vs. a placebo.

The company touted the treatment’s efficacy over a 2-week timeframe, but this wasn’t enough to quell investor concerns over the primary endpoint setback.

Many investors remain hopeful in the long-term growth prospects of psychedelic treatment, including Ark’s Cathie Wood who actively snatched up shares of ATAI in 2022.

We featured ATAI and other creative players in healthcare in November – we believe the psychedelic market remains in the early stages and will continue to be volatile in the near-term.

Everyone that wanted a home gym… has a home gym?

New Years 2023 may be remembered as the final nail in the coffin of the COVID-inspired home gym boom.

More on this tomorrow as we dive into impacts on PTON, PLNT, XPOF, and more.

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