All Posts by Jani Ziedins

Follow

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 earned a B.S. in Mechanical Engineering from the Colorado School of Mines and an MBA and M.S. Marketing 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 10

Where are bitcoin prices headed next?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis

Bitcoin rallied nicely late last week and retook the $8k level. This is the first time since November the cryptocurrency has traded this high. This latest bounce inevitably leads us to the more important question, where are prices headed next?

The most obvious place to start is the attached chart. You don’t need to be a Certified Master Technician to see the problems with Bitcoin’s chart. On multiple timeframes this currency is experiencing a strong downtrend, most evident by the clearly defined pattern of lower-highs. Last year’s bounce to $10k was impressive and I was cheering for it the entire way, but at this point, it looks like that rebound ran out of energy and every subsequent bounce has been lower and lower. The biggest point of concern is in the mid-$6k range. This is where Bitcoin prices collapsed last time. We still have a bit of a buffer, but things could get real ugly if we return to this critical tipping point.

Bitcoin is setting up for a nice trade here. Hold above $8k and everything is great. But if support fails, look out below. The most obvious way to trade this is buying a move above $8k and shorting a dip under it. While this strategy will inevitably lead to a few whipsaws along the way, no doubt the next big move will start from here and it could go in either direction. I don’t mind getting whipsawed a little over the near-term if it means I will be in prime position to catch the next big move. The best way to manage these nuisance whipsaws is to start small and only add to your position after the trade starts working.

All of that said, given this sickly looking chart, if I were forced to choose, the most likely next move is lower and chances are good prices will undercut last year’s $3k lows. The only hope this has over the near-term is if we break through $12k and end this pattern of lower-highs for good.

Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every week.

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, have actionable analysis and a trading plan delivered to your inbox every day during market hours

Follow Jani on Twitter

Tags: Bitcoin BTC.X

Jan 09

Is NFLX still a buy?

By Jani Ziedins | End of Day Analysis

Free After-Hours Update

NFLX has been struggling for six months to recover from its disappointing earnings report last summer. That said, it looks like the worst is behind it and the stock is well above its September lows. In fact, it doesn’t have far to go before it recovers all of last year’s selloff. Now that things are finally looking constructive for the stock, the bigger question is if it is still a buy at these levels.

I’ve been bullish on NFLX for a while. Last fall’s selloff was clearly overdone and it reached the point of being “so bad it was good.” Risk is a function of height and the lower we go, the less room we have to fall. Granted, this rule only applies to businesses with a bright future, but if we still believe in the fundaments of a company, every dip presents a buying opportunity. While panicked NFLX owners were busy abandoning their stock at steep discounts last summer, savvy investors were presented with a buying opportunity.

Without a doubt, NFLX was overbought last summer and even meeting expectations was going to be difficult. But once that bubble burst, everything turned around. By the time of the next earnings report, expectations were so low it was easy to beat them and that is why the stock popped. The recent tumble and sour sentiment made NFLX feel like an extremely risky buy, but it was actually one of the safest times to buy the stock in years. The thing to remember is the best opportunities come when other traders are nervous, not when everyone feels confident.

A lot can change in three months. Last quarter’s earnings confirmed NFLX isn’t headed out of business and the stock is dramatically higher. Today’s setup definitely nowhere near as attractive as it was three months ago. But an important thing to realize about the last six months, there has been a tremendous amount of selling in the stock. Nervous owners were abandoning ship and selling to confident dip buyers. Even though the stock is a lot higher than it was near the lows, the current ownership group is far more robust than it was when this selloff started.

NFLX is still a buy here, but as I already mentioned, higher prices mean this is a riskier buy. Trade an appropriate size so if the company reports dreadful earnings in two weeks, the loss isn’t unreasonably large. If earnings are bad, abandon ship and even consider shorting the stock. But if they meet expectations, or better yet, beat expectations, this stock will be making new highs in no time. One negative outcome versus two positive outcomes, I like those odds. There are no guarantees in the market, but this setup is attractive.

Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every week.

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, have actionable analysis and a trading plan delivered to your inbox every day during market hours

Follow Jani on Twitter

Tags: S&P 500 Nasdaq $SPY $SPX $QQQ $IWM $NFLX

Jan 08

Why the market rallied today

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

It’s been a dramatic 24 hours for the S&P 500. Iran launched rockets at two U.S. airbases in Tuesday evening, sending futures tumbling nearly 2%. Between the headlines and the futures market’s reaction, it was easy to be concerned for our equity positions on Wednesday. Yet barely 12 hours later, futures recovered those towering losses before the open and the index opened in the green. And it got even better, prices actually rallied to record highs later that afternoon!

While this performance was definitely awe-inspiring and a bit shocking, this resilience shouldn’t have surprised anyone. This was the fourth session in a row affected by headlines from the Middle East. It started Friday, then Monday, and again on Tuesday. What did all three of those sessions have in common? Owners largely shrugged and continued holding for higher prices. Would a fourth day of headlines change anything? Probably not. And that is exactly what happened today. Owners shrugged, supply dried up, and prices rallied back to the highs.

Agree with the market or don’t, but there is no arguing with it. If this market doesn’t want to go down, there is only one way to trade it. Anyone who overreacted to these developments is dumbfounded by the market’s blatant disregard for headlines that “obviously” should have sent stocks crashing. But while those people are busy arguing with the market, others of us are over here making money. I see a market that refuses to go down on bad news and from experience, there are few things more bullish than a market that refuses to go down.

I have no idea how much longer this strength can last, but as long as it keeps doing all the right things, I’m going to stick with it.

Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every week.

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, have actionable analysis and a trading plan delivered to your inbox every day during market hours

Follow Jani on Twitter

Tags: S&P 500 Nasdaq $SPY $SPX $QQQ $IWM