Tips to Trade the EV Reversal

[RagingBull Elite]( Last day to register: You can learn a lot from winning trades, but you can learn even more from the losers. Nate Bear was down -$40,000 before he turned things around to achieve nearly $4 million* in career trading gains. [He owes a large portion of his success to one setup, which he reveals live tomorrow at 2 PM ET.]( Dear trader, If you looked at the overall market yesterday, things were pretty quiet. Compared to the four previous Mondays this month where the market popped on some kind of vaccine news, we didn’t see any big macro drivers. Sectors are currently down, but not by any large amount. This morning, we’re seeing a drop in futures as traders struggle to figure out whether there will be another round of stimulus and what happens during the advisory committee meeting for the Pfizer-BioNTech vaccine. However, based on the overall trend, the market still looks bullish overall heading into the new year. But we did see signs of continued strength, as well as reversal, in some notable names. We saw some nice movement in SPCE yesterday, and Ben Sturgill even spotted [some PLTR activity showing up in the dark pools.]( We also saw a rip higher from electric vehicle stocks, including NIO and LAZR (a Lidar company). Right now, the EVs are looking oversold, and we may start seeing more cash returning to those stocks in particular, and a short-term bounce. In All-Access today, we’ll reveal how traders could have gotten long on LAZR yesterday— as well as what other hot, actionable plays we’re looking into today. It is not always easy to pick out just one chart of the day… Yesterday, for example, the entire EV sector exploded higher: NIO closed up 4.81%; TSLA, 7.13%; BLNK, 12.75%. One of the largest movers in the sector, however, was LAZR with a 30.19% gain. The company, Luminar Technologies, focuses on lidar solutions for autonomous electric vehicles. Fun fact: in 2019 Elon Musk said “Anyone relying on lidar is doomed” due to the relatively high cost of the technology. However, this did not prevent Luminar stock from skyrocketing. Luminar went public through a reverse merger with Gores Metropoulos, a SPAC which was trading at $10 less than a month ago. On Thursday last week, GMHI was changed into LAZR and shares went from $18 to the high of $34.44 within the first two days. Yesterday, the stock ripped from $33 to $43.38. Here’s a recap of how one could’ve traded it: Sector strength is key to selecting the right stocks to trade and SPACs have been extremely hot in the past few days. The last piece of the puzzle of making a good trade was just a matter of waiting for the proper intraday setup. As you can see on the chart above, simple clues such as the stock holding above VWAP or breaking its opening range high can be powerful tools to make a successful long trade if you are watching the right names. Familiarize yourself with them, so that next time you can be better prepared for what might happen. EV stocks are popular among big institutional traders right now. [Learn how Ben Sturgill is tracking their entries based on activity in the dark pools.]( As counterintuitive as this may be, on the surface all the market’s really been doing is following the trend. It feels unnatural to see this many stocks rip up and never look back, but that’s what happens in a market so strong. Pull up a daily chart of any of the latest headline-makers— an EV name, a tech stock, any hot IPO— all you’ll see is a steady trend higher with a few short-lived pullbacks. We know firsthand buying higher is a very challenging thing to do mentally— as short-term traders, we typically don’t like chasing stocks. We prefer to be patient with our entries with clear risk levels, rather than buying up in hopes there will be a greater fool to sell to. However, at times like now, when greed gets unleashed and momentum accelerates, we too have to adapt and start trading breakouts rather than dips. A good way to smooth this transition out is to cut down your size. If you’re used to trading 1000 shares, trade 400 and start with even less. Mentally, it will make it a lot easier for you to focus on the bigger picture idea and allow for proper wider stop areas. The larger move you’ll catch will compensate for lower share count. This is exactly what allowed Jason Bond to score big wins in names like NNDM and CCL. Today’s watchlist is exactly that— 3 high momentum names where we’d rather buy strength: Palantir (PLTR): - The Peter Thiel-backed big data firm has been one of the hottest IPOs of the year and it’s lived up to its promise - the stock is up over 3-fold in just 2 month - Hype aside, the company has been delivering - it had an impressive quarter and keeps announcing new government contracts - As the stock is pushing close to all-time highs again in a classic dip-rebound pattern, the $30 level becomes our main watch - any move above that should trigger further momentum to re-test and take out the highs Moderna (MRNA): - Much like PLTR, this leading vaccine-candidate developer needs no introduction - Ever since the news of great safety and efficacy came, the name has been on a tear only further supported by ever-expanding orders by various countries around the world - Any hold above yesterday’s intraday resistance at $163 is very bullish near-term with the potential to test and take out prior highs Luminar Technologies (LAZR): - We’re not taking this one off the board yet. The stock might have fireworks potential - any hold above $42 might launch it into $50 area and possibly higher a lot higher 2021 is going to be a big year. We polled a few of our trading experts on what they’re expecting to see in the markets heading into the New Year... “I am making some big bets on EV stocks for a bounce starting tomorrow. They are due to take a retest at highs, but will fail. I think this rally for the whole market is really in the late innings and it’s time to position for a pullback before the final EOY ramp. Tech is really scared of higher yields and bonds are in jeopardy right now. Couple that with extreme optimism from retail traders, low VIX, and very little short interest in the market, and we have all the ingredients needed to have the rug pulled out from under us soon. I’m going to enjoy the ride a little longer, but will be ready to change gears quick.” ~ Jeff Bishop of Total Alpha With Pfizer about a week away from probable vaccine approval and stimulus likely right behind that, I'm betting aggressively on travel, cruise, and restaurant stocks into that news. Marijuana rallied into the House vote and sold off into the positive news, but I think Biden taking over will lead to another rally— so I'll look to buy this dip. Put / call ratio is as low as it's been in 10 years, so I'm looking for something to trigger a sharp selloff. ~ By Jason Bond of Jason Bond Picks I’ll be fishing in the energy sector with CEI and ZNOG here... pot sector MCOA, MJNA TRTC, ERBB, HEMP… and a small cap EV stock to revisit is ALYI specifically, as they should have an update on their motorcycle soon. That should get me started. ~ Jeff Willaims of Penny Pro The trend is your friend until it ends— and so, as so many retail traders load up here, I'll plan to keep my stops tight and expiration dates short as I think the market has the opportunity to cause some serious pain to a lot of people soon. That said, with a sharp and short pull back in mind, I think the market keeps rallying into the end of Q1 as I expect more stimulus, continued hope of returning to 'normal' as the vaccine is distributed, and a new administration is active in its first 100 days. Also, I think 2021 will see a continuation of the hype and strength in SPACs and IPOs. ~ Ben Sturgill of Daily Profit Machine [2 Options Plays Set To Benefit From Vaccine News]( By Jason Bond of Weekly Windfalls --------------------------------------------------------------- [Moving Into The Industrial EV Market: GTEC]( By Jeff Willaims of Penny Pro --------------------------------------------------------------- [Here’s How To Play The Surge In Oil]( By Jeff Bishop of Total Alpha --------------------------------------------------------------- [The Trifecta Of Trading Strategies?]( By Dave Lukas of Options Profit Planner To Your Success,The RagingBull Team *Results presented are not typical and may vary from person to person. 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