All Posts by Jani Ziedins

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About the Author

Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.

Jan 15

Is this the start of the end?

By Jani Ziedins | Weekly Analysis

Free Weekly Analysis:

The S&P 500 lost 1.5% this week. Not great, but had it not been for the previous week’s strong gains, Friday’s close would have been a record high.

Everyone knows stocks cannot go up every…single…day (or week). Markets move in waves and every two steps forward are followed by one step back.

This week’s step-back was triggered by Biden’s extremely generous Covid relief package. The size caught some investors off guard and rather than cheer the extra free money, some people started fretting over the inevitable tax increases. Giveth with one hand, taketh with the other.

But should we really be worried about a 1.5% giveback? Say what you want about this market, but weak and vulnerable markets don’t keep setting new record highs. This bull market will die like all of the others that came before it, but this is not that time. Keep giving this rally the benefit of doubt until it gives a clear and compelling reason not to. Until then, enjoy the ride.

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Jan 14

Is it time to give up on FB?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

While the S&P 500 keeps carving out fresh all-time highs, FB finds itself falling into a hole and is down nearly 20%. That’s an unusual position for one of this country’s most popular and profitable companies.

This latest leg lower kicked off after the company announced it was suspending Trump’s accounts for violating their terms of service. No doubt investors are expecting a backlash from Trump supporters and no doubt there will be an incremental hit to their revenues. But as far as boycotts go, this one will be fairly mild.

Very few corporate advertisers will join this boycott because they don’t want to get dragged into the dumpster fire taking place in Washington D.C. That means FB’s advertising rates won’t take a meaningful hit.

As far as users go, FB’s target audience is suburban soccer moms who share cupcake recipes. They are unlikely to abandon FB and head over to these unmoderated free speech alternatives. (For anyone not familiar with these venues, they can be very disturbing, even for those with thick skin.)

And once these Trump headlines blow over, there is still the threat of Democrats breaking the company up for being anti-competitive. But you know what? Those storm clouds will pass too. It’s been a long time since the government forced a company to break up and it’s unlikely to happen this time. This is almost certainly more bark than bite. (And chances are Democrats will go easy on the company if they continue their hardline with Trump.)

FB’s near-term pain isn’t over yet, but we should be looking at further weakness as a buying opportunity, not a reason to leave the company for dead.

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Jan 13

ZM: Bargain or Bull Trap?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

It’s been a good couple of days for ZM. The stock bounced decisively off recent lows and gained 5.7% Tuesday and it added another 2.2% Wednesday. What’s not to like about that?

Well……

Every rebound starts by bouncing off of the lows and ZM has done a great job resisting another leg lower this month. I often say, “something that refuses to go down will eventually go up.” Unfortunately, that doesn’t apply to ZM here. In fact, this looks more like the mirror image, “something that hangs out near the lows long enough will eventually fall under them.”

Tuesday’s bounce was a good start, but Wednesday’s 2.2% gain was actually more bearish than bullish. That’s because the stock retreated from much higher levels earlier in the day. In the stock market, it’s now how you start, but how you finish that matters most. And in this case, rather than embrace the early rebound, regretful owners took the opportunity to sell these higher prices. Selling pressure every time the stock rallies tells us a large number of owners have given up and are looking for the best way to exit their positions. That’s never a good sign.

As far as the stock chart goes, even the last two days of gains cannot erase all the damage that’s been done. At the very least, the stock needs to get above $380 resistance and break above the larger downtrend. Until then, this remains a shockingly bad chart.

ZM will be a lot more interesting if it back above old support at $400. Until then, this is a no-touch (and a shorting opportunity for the most aggressive trader).

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Jan 12

A plan for protecting Bitcoin profits

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

It’s been a wild few weeks for Bitcoin. The last time I covered this cryptocurrency on my free blog was back in mid-December when it first broke the $20k barrier.

As I wrote back on December 16th:

I don’t expect this buying frenzy to cool off anytime soon. As I said [in early December], maybe the top is $25k, maybe it is $30k. Or maybe we keep going to $40k. Who knows. But when something moves this fast, the only choice we have is to grab ahold and see how far it goes.

This is a strongly directional move and we can (and should) follow this higher with a trailing stop. Right now $20k is a good level to protect our profits. When prices get up to $25k, we move our stops up again. $30k, ditto.

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To be honest, my initial $40k profit target was a tad optimistic, but BTC proved all of the doubters wrong and did something that seemed impossible only a few months ago.

But now the $40k euphoria is wearing off and we already find ourselves in the lower half of the $30k’s. This is definitely a challenging spot for Bitcoin. Prices rallied 400% from the October lows and anyone expecting this buying frenzy to continue another 400% is quite honestly, drunk on greed.

All good things come to an end and so will this latest surge in Bitcoin. Maybe this week’s brief poke above $40k was the near-term top for this rally. Maybe we get a little higher. Either way, we need to be thinking about taking profits, not pressing our bets. We only make money when we sell our winners. And unfortunately, as quickly as these things go up, they fall even faster.

Make sure you have a plan to take profits and don’t let these epic profits escape. Maybe you take profits proactively. Maybe you keep following this higher with a trailing stop. Or better yet, do a bit of both; take some profits proactively and follow the rest higher with a trailing stop.

But no matter what you do, have a plan. Only fools hold too long ride these things all the way back down.

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Jan 11

Do we need to worry about this political uncertainty?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 slumped Monday morning as investors contemplated the disaster taking place in our nation’s capital. But as has been the case every other time recently, most stock owners shrugged and kept holding for higher prices.

To be honest, none of this political noise matters for corporate profits. If Trump gets impeached or if he doesn’t get impeached, Biden is still taking office on January 20th. The same goes for widespread protests over the week. The BLM protests didn’t hold stocks back last summer and Trump protests over the next few weeks won’t turn out any different for stocks.

The only thing that threatens this rally is a shift in investor sentiment. Up to this point, this has been an unstoppable rally and chances are good this modest wobble doesn’t change anything.

As I often say, a market that refuses to go down will eventually go up. Headlines are overwhelmingly negative and if this market was vulnerable to this political uncertainty, there have been far more than enough excuses to send stocks tumbling. Instead, most owners keep holding for higher prices and that confirms this is a strong market, not a weak one.

It gets a little tiring writing the same thing every day, but as long as we are making money, we have nothing to complain about.

While we are always on the lookout for the next big turning point, only a few of those occur each year. The rest of the time we stick with what is working. In this case, that’s holding for higher prices as long as the index remains above our stops in the mid to lower 3,700s.

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Jan 06

Should investors be worried by all of this political unrest?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Wednesday was a shockingly bad day for American democracy. But as dramatic as the pictures were from inside the Capitol, the stock market barely flinched.

As I wrote Tuesday:

It doesn’t get any more straightforward than this. [The S&P 500] is buyable above 3,660 and sellable/shortable if the index falls under this level.

The index opened just above 3,700 support and that was all the confirmation investors needed that Monday’s selloff was truly dead. A couple of hours later, frenzied buying pushed prices 80-points higher and the S&P 500 was carving out yet another intraday record high.

Unfortunately, the afternoon unrest at the Capitol dampened the market’s mood slightly before the close. But finishing up 0.5% on a day when the U.S. Capitol is ransacked by an angry mob shows just what a bizarre period in history this is.

As I often say, if the market doesn’t care about these things, then as investors, we shouldn’t care about them either. While it seems like the world is crumbling around us, as long as stock keep going up, there is only one way to trade this. A market that refuses to go down on bad news is one that clearly wants to go higher. Stocks took a breather in December and now they are rested and ready to start charging higher in January. There is only one way to trade this stubborn strength.

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What’s a good trade worth to you?
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