Optimism May Get a Reality Check Soon

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STATE OF THE MARKETS

Market optimism remains in the driver seat while waiting for reality check. Other than S&P and Nasdaq that closed lower, major overall markets remain in optimism with the Dow breaking highest in 3 years at 29,478 followed by the commodities markets that are all in green. The benchmark 10Y yield was up 13 basis points, yielding 0.96% as demand for safe-haven waned.

Crude continue the rally to close 1.18% higher at $41.85/barrel while gold remains supported at the $1,880/oz after reaching the low of $1,850 when news of covid-19 vaccine broke-out.

In the FX space, optimism abound in the long and medium term accounts as USD, CHF and JPY are on the back burner. Kiwi is taking the lead when RBNZ decided to keep rate unchanged for now. Markets are expected to remain in sideways as players reposition themselves while waiting for the next catalysts.

 

 


G8 CURRENCIES SENTIMENTS

ST GBP NZD JPY AUD EUR CHF USD CAD ST
MT NZD AUD GBP CAD EUR CHF USD JPY MT
LT NZD GBP AUD CAD JPY EUR USD CHF LT
** ST refers to Short-Term which is daily turnover, MT is Medium Term which is 
weekly
and LT refers to Long-Term which is monthly turnover.

WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
NIO 41.55 -5.61 237,403.6K 140,437.6K
GTEC 5.16 +120.51 166,088.7K 109.1K
GE 8.98 +2.98 164,733.6K 96,927.1K
AAPL 115.97 -0.30 138,023.4K 160,135.8K
WISA 3.63 +70.42 132,156.4K 452.7K
SQQQ 21.04 +5.31 129,366.2K 58,072.1K
AAL 12.38 -6.21 127,529.3K 65,872.5K
F 8.38 +2.20 87,468.4K 63,875.0K
XLF 27.15 +0.52 85,851.2K 58,287.7K
BAC 27.66 -0.36 77,694.6K 61,461.0K
** % Change here refer to price vs previous day price

WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
AMZN 3,035.02 6,590.9K +16.12 20,003.5M
BABA 266.54 61,063.9K +201.28 16,275.9M
AAPL 115.97 138,023.3K +11.06 16,006.6M
TSLA 410.36 30,284.2K -5.79 12,427.4M
NIO 41.55 237,403.6K +23.09 9,864.1M
MSFT 211.01 44,045.1K +39.73 9,293.9M
BA 188.69 46,404.3K +160.58 8,756.0M
NVDA 510.80 16,101.6K +93.10 8,224.7M
FB 272.43 29,067.6K +27.48 7,918.9M
ZM 376.01 20,751.9K +102.81 7,802.9M
** % change here refers to volume vs. 20 days average volume.

TOP 5 BLOCK ORDERS

TICKER PRICE/STRIKE TYPE VOL/OI FUNDS FLOW
BABA 266.54/275.00 stock options/call 132.08 16,275.9M
FE 29.31/28.00 stock options/put 130.63 249.6M
TSM 87.66/88.00 stocks options/call 94.94 731.9M
GC 1,873.50 – 1,876.10 gold futures 250 46.9M
CL 40.60 – 42.60 crude oil futures 3,980 195.2M

OUR PICK – Tesla (TSLA, Nasdaq)

When reality sets in, Tesla will fall. We have long followed Tesla and it’s a classic example of “markets can remain irrational longer than you can remain solvent”. At more than 800 times of its earnings which is 100 times higher than the auto industry, it’s not a favored buy right now. Fair to say that it’s fairly valued at PEG of 2.39 which is about the range in the industry and at this point long term buyers are cashing in their profits and the stock is finding the next direction which we believe lower. Order flow suggested that the stock is under selling pressure with 21 and 8 days VPOC converged at $422.85, slightly higher than the monthly pivot $411.02. Sell on rally with $455 stop.

HORIZON STRATEGY SL TP1 TP2
Short-Term Sell 455.00 391.20 377.80
Medium-Term Sell 455.00 377.80 357.40
Long-Term Sell 455.00 357.40 324.30

 

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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MFM Team