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Stocks Picks December 27th, 2020 | SPY, TSLA, AMZN, LULU, CRSP

Updated: Jan 19



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In this Issue


S&P 500 ETF

Pending stimulus, Market should stay flat or increase to $374

Tesla

S&P 500 inclusion, CEO Elon adding all of his companies into an ETF, Apple icar

Amazon

Holiday numbers Monday, January earnings run up

lululemon athletica

Expected to crush holiday sales

Crispr Therapeutics AG

Over 5,000 research articles published on this technology in 2020 alone

S&P 500 ETF : SPY

The SPY is an ETF that follows an index. The index holds shares in the top 500 performing US companies. It is widely tracked as an indicator for the US market.


Price Forecast

Current Price: $369.00

One Week Target: $374

One Month Target: $377

One Year Target: $425

The stimulus package for the COVID relief bill that was passed by both the house and the senate has not been signed by President Trump. In a tweet from our President, he asked for $1000 to $2000 stimulus checks instead of $600. He also asked the bill to be changed so that less foreign aid was included. Investors will be watching the possible changes in the stimulus package as it unfolds in the coming weeks. Since President Trump does have a sway on the markets, observe where the COVID relief bill moves.

You should definitely buy if the stimulus is passed as it will increase liquidity in the markets.

PREMIUM PREVIEW

Premium Options Trade Idea:

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Options Strategy: SPY put credit spread

Sentiment: Bullish

Sell Put $368.00 expiring Jan 4th

Buy Put $363.00 expiring Jan 4th

Entry Cost: $122.00 (net credit) see details

Maximum Risk: $378.00 at a price of $363.00 at expiry

Maximum Return: $122.00 at a price of $368.00 at expiry

Breakevens at Expiry: $366.78

Below is a graph showing your expected profit/loss as the price varies.


Source: Optionsprofitcalculator.com

Tesla : TSLA

"Tesla, Inc. designs, develops, manufactures and sells electric vehicles and designs, manufactures, installs and sells solar energy generation and energy storage products. The Company's segments include automotive, and energy generation and storage."

Price Forecast

Current Price: $660.00

One Week Target: $690

One Month Target: $700

One Year Target: $850

Tesla is in the midst of it’s all-time highs. They were included in the S&P 500 index which is a very good confidence boost for investors. JP Morgan has recently declared a price target of $90 per share. Other top analysts and institutions like ARK Invest, have declared price targets above $700. Another reason Tesla may trade higher in the coming months is the non-technical reason that Elon Musk is speculating on making an ETF. (Ticker symbol called “X.”) This ETF will be a composition of all of the companies he owns. News of this could spark more hype in TSLA stock. Also, the iCar was announced from Apple which could add more speculation of Tesla helping manufacture their cars. Elon Musk welcomes companies to transition to EV as it helps the industry in whole.

This is a buy. Make sure to watch Apple’s progress on their cars as this could impact Tesla’s share price in the short term.

PREMIUM PREVIEW

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Options Strategy: TSLA call debit spread

Sentiment: Bullish

Buy call $660 expiring Jan 8th

Sell call $710 expiring Jan 8th

Entry Cost: $1,910.00 (net debit) see details

Maximum Risk: $1,910.00 at a price of $660.00 at expiry

Maximum Return: $3,090.00 at a price of $710.01 at expiry

Breakevens at Expiry: $679.11

Make sure to close this position around Jan 4th. This will keep you from losing money from time decay and give you higher opportunity to profit.


Source: Optionsprofitcalculator.com

Amazon : AMZN

"Amazon.com is a vast Internet-based enterprise that sells books, music, movies, housewares, electronics, toys, and many other goods, either directly or as the middleman between other retailers and Amazon.com's millions of customers."

Price Forecast

Current Price: $3,171.00

One Week Target: $3,250

One Month Target: $3,400

One Year Target: $4,000

Holiday Sales numbers are announced this Monday, December 28th. Amazon should increase their sales year over the year, especially with the pandemic creating consumer habits to purchase online. Ark Invest purchased more Amazon on December 21st. These are bullish signs, as Amazon has pulled back from it’s all-time high which is approximately $3,500. I am expecting a run up in share price before earnings January 28th. Historically, Amazon has run up in January after Christmas and the holiday sales boost.

This company is a buy. Expect a price bump from the sales numbers on Monday, December 28th.

PREMIUM PREVIEW

Premium Options Trade Idea:

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Options Strategy: call Debit spread

Sentiment: Bullish

Buy Call $3170 Expiring Jan 29th

Sell Call $3270 Expiring Jan 29th

Entry Cost: $4,293.00 (net debit) see details

Maximum Risk: $4,293.00 at a price of $3,170.00 at expiry

Maximum Return: $5,707.00 at a price of $3,270.00 at expiry

Breakevens at Expiry: $3212.95

For this idea, sell before earnings on January 28th. There may be a large surge in price as the historic run up after December is now in effect.


Source: optionsprofitcalculator.com

lululemon athletica : LULU

"Founded in Vancouver, Canada in 1998, lululemon athletica is a technical athletic apparel company for yoga, running, training and most other sweaty pursuits."


Price Forecast:

Current Price: $351.42

One Week Target: $355

One Month Target: $360

One Year Target: $400


lululemon revenue increased 22% to $1.1 billion. Comparable sales increased 19%, or 18% on a constant dollar basis. Diluted EPS of $1.10, Adjusted EPS of $1.16. The company ended the third quarter of fiscal 2020 with $481.6 million in cash and cash equivalents and the capacity under its committed revolving credit facilities was $697.3 million. lululemon has broken into men's fashion, as well as acquired “Mirror.” Mirror is an at home fitness system which could be another big source of income and way for lululemon to grow.



lululemon had a strong Q3 report with the holiday sales, and I expect them to continue moving upward in price. The price dropped at the end of the week (December 24th) and looks to be at a good price to buy.

PREMIUM PREVIEW

Premium Options Trade Idea:

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Option Strategy: put credit spread

Sentiment: Bullish

Sell Put $350 expiring Jan 8th

Buy Put $345 expiring Jan 8th

Entry Cost: $220.00 (net credit) see details

Maximum Risk: $280.00 at a price of $345.00 at expiry

Maximum Return: $220.00 at a price of $350.00 at expiry

Breakevens at Expiry: $347.80

I expect LULU to return to $370 in this time frame. Make sure to sell when you are in profit. Watch carefully as this could dip to $343 before rising up.


Source: Optionsprofitcalculator.com

Crispr : CRSP

"CRISPR Therapeutics is a leading gene editing company focused on developing transformative gene-based medicines for serious diseases using its proprietary CRISPR/Cas9 platform. CRISPR/Cas9 is a revolutionary gene editing technology that allows for precise, directed changes to genomic DNA."

Price Forecast

Current Price: $169.07

One Week Target: $172.10

One Month Target: $178

One Year Target: $200

CRISPR Therapeutics received a grant to advance in Vivo CRISPR/Cas9 gene editing therapies for HIV. Crispr is using genome editing to solve problems that would otherwise have to be lived with. I think there is a huge upside to Crispr with relatively low risk.

Check out this video covering why Cathie Wood from ARK Invest believes the largest upside stock opportunities will be in genomics.



PREMIUM PREVIEW

Premium Options Trade Idea:

Click on this informative website for details on the trade! Optionprofitscalculator.com


Option Strategy: put credit spread

Sentiment: Bullish

Expiring: Jan 8th

Sell put $165

Buy put $157.50

Entry Cost: $315.00 (net credit) see details

Maximum Risk: $435.00 at a price of $157.50 at expiry

Maximum Return: $315.00 at a price of $165.00 at expiry

Breakevens at Expiry: $161.85

CRSP should go up to $180 during this time frame. Close the position in profit.


Source: Optionsprofitcaculator.com

Thanks for reading our newsletter. We hope you found value in it and are able to make some good, money-making decisions this week. Pass this on to a friend who would also benefit!

Until next week,

Brad Mitchell

Colby McCoy

and the Optifinancial Team

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