Trading the Charts for Thursday, May 11th
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Good morning and Happy Thursday,
CPI came in pretty much as expected yesterday morning - the initial reaction was higher but then we saw a selloff mid-afternoon but then a nice bounce of SPX off 4100 which took the indexes higher to finish up 0.5% on the day with the Nasdaq up 1% on the day. Yesterday I was up about 4% in both my portfolios because of CELH which was up 20% on the day. We continue to see a wild earnings season with lots of 10-20% moves higher and lower. In my investment portfolio I almost always hold my stocks with current positions into earnings because these are stocks I’m typically planning to hold for 2-3 years with an average holding period of 18 months. In my trading portfolio I only hold stocks into earnings if I have conviction and a profit 6% or higher profit cushion. Yesterday I did trim some CELH at $130+ but I’m still holding 90-95% of the shares that I had going into earnings.
FWIW, I still think CELH could be a $300 stock in 3-4 years if they can do $3+ billion of revenues in 2026 with 16% net income margins. I doubt most people realize this but MNST is a $62 billion company and Red Bull if it was publicly traded would probably be an $80 billion company so the market for energy drinks is massive and CELH will continue to grow much faster than any of them. I think CELH has a shot at 70% revenue growth this year and 50% growth next year because Pepsi is now their main distributor which operates in 150+ countries and will take Celsius into some of the larger ones.
Equity futures are down slightly but the Dow futures are mostly being dragged down by DIS after their earnings report last night and now there’s new data showing that PACW lost 8-9% of their deposits last week so that stock is down -25% pre-market.
Yields have been trending lower with 2Y at 3.86% and 10Y at 3.39%
Before we get PPI this morning there’s a 96% chance of NO RATE HIKE at the June FOMC meeting.
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