After this weekend, I’m confident there’s nothing Elon Musk can’t do.
The guy is a pure genius.
On Saturday, he made history. He heads up SpaceX, which became the first private company to send astronauts into outer space — an American company, with American astronauts, from American soil.
It was truly incredible.
Ten million people watched the launch as it was livestreamed.
After NASA had to postpone the original launch on Wednesday due to inclement weather, this one came down to the wire once again. The final “all clear” from the rain wasn’t given until seven minutes before the launch.
It was a sight to be seen.
Everything from the spaceship’s narrow design to the big monitors in the cockpit, to the spacesuits themselves, was completely different from nine years ago — during the last manned launch from America in 2011.
Tesla’s (NYSE: TSLA) sleek look was seen all over the place. Musk also owns Tesla, the all-electric carmaker, which has revolutionized the way we travel in our cars. Now, Musk’s SpaceX is working with NASA to revolutionize the way we travel to space.
The astronauts even rode in a Tesla Model X to the launch site. And the big touchscreens in the cockpit were similar to the driver’s console of every Tesla — all screens, no buttons.
It was a great branding moment for Elon Musk to intertwine these two great companies — I see more of that in the future.
Musk even mentioned on Jay Leno’s Garage that the upcoming Tesla Roadster will have an option for rocket thrusters, courtesy of SpaceX. They’ll be hidden behind the license plate and will pop out only when necessary.
We already know SpaceX is headed to infinity and beyond, as Toy Story’s Buzz Lightyear would put it.
But will it bring Tesla along for the ride?
Tesla has struggled to overcome hurdles like profitability. And that has weighed on the company and the stock, creating major uncertainties about whether the company can continue to make enough money.
Today I’ll explain what this historical moment for SpaceX means for the future of Tesla.
For a more short-term take, I put together a new video called Quick Takes — a quick break down on whether certain stocks are Bank It or Tank It stocks.
I use technical analysis to determine key levels to watch and when to place certain trades. In this video, I look at Tesla, Shopify (NYSE: SHOP), Starbucks (Nasdaq: SBUX), Intel (Nasdaq: INTC) and more. You can see my take on these stocks by clicking here.
Tesla Will Benefit From the SpaceX Launch
Now, aside from Musk’s historical space launch, he has been busy making appearances on CNBC’s Jay Leno’s Garage and Joe Rogan’s podcast, The Joe Rogan Experience.
I checked out both over the weekend.
And, when including the space launch, I can officially say I’m blown away about the potential it means for Musk’s one publicly traded company, Tesla.
All of his other projects and ideas remain private companies. Tesla is the only way to publicly invest in the exposure that SpaceX is bringing to Elon Musk and to the electric vehicle brand.
Tesla doesn’t have the same growth potential as SpaceX, because we are not investing directly into SpaceX. But as these companies combine on more projects, like rocket thrusters in cars, it will bring a “cool” factor to Tesla that you can’t price in.
While betting on the stock to be higher in the future is a no brainer, it won’t be a straight shot higher like his Falcon 9 rocket.
There’s going to be some ups and downs and even delays.
This historic launch had to scrub the first official time spot and move to Saturday because of the bad weather. And just one day before the manned launch, SpaceX experienced a huge explosion at their Texas launch facility with a Starship prototype.
But when I step back and look at everything Elon has going on — from SpaceX, to Tesla, Neuralink and The Boring Company — Tesla may be the biggest beneficiary.
Don’t Bet Against Tesla Today
Everyone gets caught up on the fundamentals of the company. What’s the price-to-earnings (P/E) ratio, debt levels, and does it have enough cash flow?
And Tesla has been caught up in that debate for years now.
Some investors look at the balance sheet and the revenues and see that Tesla could run into trouble if sales begin to slump — they could even go bankrupt.
While that’s true for all companies, Tesla is one of particular interest because it’s priced at extremely high valuations. Investors expect nothing but good things from the company. And as the fundamental analysts rightly point out, that can be dangerous if Tesla’s business slows.
But when you look at what Tesla is doing and the potential growth in the near future, it doesn’t make sense to look at the company’s fundamentals, even today.
After seeing how eager Elon Musk is to combine the technology from one company to another — rocket thrusters and design — there isn’t a car company on this planet I would want to have a stake in more than Tesla.
With these major technological revolutions at his fingertips, Tesla shares are on a path to infinity and beyond — you just have to be along for the ride.
Be sure to check out my YouTube video to see the key levels to watch on the stock today.
Stock Quick Takes: Tesla, Starbucks, Sony and More
I feature this in other Bank It or Tank It videos where I’ve just added on a segment featuring my quick takes on stock. In these videos, I run through a few stocks and let you know whether or not I would “bank them” or “tank them” based on some quick stock analysis from me. Today, I just wanted to dive into those a little bit.
In my GameStop video, I featured my profit-stacking strategy, which is based on a seasonal service that I have. But on this video, whenever the “i” comes up, it’ll be about options training that I have to help you learn how to trade options the way I do. That way, you can make big returns in a short amount of time. So be sure to check that out when watching the video.
Over the coming weeks, my Quick Takes videos are going to focus on answering questions that many of you have posted on other videos.
Let’s start with GameStop. There were multiple stocks listed here. You can see Gabriel, who says that he subscribed because of the Trade Desk video. He wants my opinion on Starbucks Corporation (Nasdaq: SBUX). He’s said, “While I’m here, how about Sony (NYSE: SNE), Agilent Technologies Inc. (NYSE: A) and Intel (Nasdaq: INTC)?”
So we’re running through those today.
Loyal viewer Oscar also wanted us to look at Shopify. Just so you know, because Lewis here also mentioned I should analyze Shopify Inc. (NYSE: SHOP). I have a Bank It or Tank It on Shopify that runs through some more of the fundamentals.
Another viewer, Lewis, wanted me to take a look at gold. Oscar also brought up Tesla (Nasdaq: TSLA), talking about how he made 156% gains shorting it in just two days. I’m going to highlight Tesla and just break out some key levels that I’m watching so that we know how to trade the stock in the coming weeks.
Let’s start with Tesla today and pull up a chart. When we take a look at this company, I still have some of the lines that we had from our last Bank It or Tank It video, which was the steep uptrend here in the green. Basically, it’s the indicator that I wanted to hold above a pullback level, which would have been sufficient for it to continue higher. And then it would hit my price target of $1,200. But it clearly broke through that. I mean, who saw the pandemic coming? Nobody did, but it definitely crashed this company. It’s been a volatile stock. It doubled in price, fell over 50% and doubled again.
Tesla is in a unique consolidation phase here, where we have a nice wedge pattern forming after a big run-up. This is called a pennant formation. It’s a nice chart pattern to trade. It’s typically a continuation pattern. We have a nice bullish run up into this consolidation phase. Now we’re looking for the breakout higher to extend the rally.
But, it doesn’t always have to work that way. We can have the breakout lower. With a stock like Tesla that is this volatile and seeing these swings, I like to play it a little safe. That’s not typically like me. Normally, I don’t mind jumping in here and trying to play the continuation side.
If I had to trade it, I would be on the continuation, expecting the stock to rally. But honestly, I would wait for the breakout to get out of this formation, out of this wedge pattern, to give us a clear indication that it’s starting to break out higher or break out lower. Then if we get any reversal from there, we’ll know to cut our losses. At that point, we’re trying to play the breakout and benefit from a new trend forming.
In Tesla, you can’t bet against Elon Musk. He’s incredible. The stuff he’s been able to do with SpaceX, Tesla and Neuralink is amazing. And you don’t want to bet against those companies. I believe that he can pull out all the cards and continue to make Tesla a skyrocketing company for years to come. It’s definitely worth looking on the upside, and that’s how it’s trading now. Tesla is going to be a #BankIt stock.
Another company we’re going to look at is Shopify. So let’s take a look at their stock chart. These red resistance lines going lower were just to show you that it’s pulled back consistently, broke out and then had a nice run up. Then it did this again and started to pull back. This was about when we had our Bank It or Tank It on Spotify. I had it as a #BankIt stock, expecting it to break out higher. But then I had this green trendline as a key support area that I wanted it to hold above.
We also had the 200-day moving average in yellow. It dipped below that and then kind of got right back above it a few days later. It hit the red resistance line that I had, pulled lower and then finally broke out of that. This upside move here was the one that you wanted to play. It had a nice pop, and then you can see just how it continues to run from there. This is an online company, helping brands sell on the web and creating an inclusive e-commerce platform. Shopify has really benefited from the pandemic, which is ironic. There aren’t many companies that have. But this one did, and it’s continued to skyrocket over this time period.
Now we’re seeing a bit of consolidation. This is just a steep trendline that you can really ignore for the thin green line. That’s just going to be too steep. But when we look at what’s forming up here, we had a bit of a consolidation, then a breakout. Then it pulled back. That’s why I think we’re still stuck in this consolidation.
Shopify is definitely a #BankIt stock over the long-term. But in the short term — I’m talking the next three months — when you look at how it’s been trading, it’s hard to bet on the rally to continue. But I’m not against it. I just want to see it break out of this pattern. So honestly, if I’m placing a trade on the company, it’s going to be a #TankIt trade. I’m going to expect shares to head lower from here and break below the green support line.
I wouldn’t mind putting this on while it is in this consolidation period, because if it breaks above this red resistance line, I’m closing it out and I’m getting out of the trade. Because at that point we’re playing the upside, and I would just flip and go to the upside, and play bullish call options on the company. That’s because I’m not against trying to get gains to the upside.
I want to take you back to Tesla real quick to highlight one thing. Because with Tesla, this green line kind of pinpointed when we did our Bank It or Tank It on the stock. But since then, I sent a trade alert to my subscribers after shares had already doubled. My system told me to buy call options. We grabbed a massive 400% gain on the second half of that trade in a matter of days because it just continued to skyrocket.
So playing the upward momentum is nice to do as long as you have a system or strategy behind it. Then, again, following our trading strategy, we got into it here. Once it started to consolidate, we grabbed another 30% gain on Tesla. So I’m glad with my gains. I don’t try to play all the whipsaws and all the ups and downs of the stock.
It’s the same with Shopify. We’re not trying to play every little price move. When we have these key areas to trade, it’s worth jumping into.
Right now with Shopify, I would call it a #TankIt trade. I’m expecting shares to head lower, but the green support line is going to be the major level to watch these resistance and support lines, as well. Once we break above or below those, then we’ll definitely know how to trade it.
Another company, we’re going to take a look at is Starbucks. Starbucks stock has definitely been struggling a little bit here. When you looked at Tesla, Shopify, we saw a massive rally here off the lows.
With Starbucks, it’s not getting back up to its previous highs, and it’s even below the previous low that it was forming to create an uptrend.
It was very alarming to see the company fail to rise above that level. So this is going to be a #TankIt stock. I expect shares to head lower. I wouldn’t trade it right now because it hasn’t consolidated long enough. I think it’ll consolidate for a little bit longer based on the volatility that it’s still seeing.
But we have the 200-day moving average rolling over on top of it, so I think if we could just bounce along this trendline for another couple of weeks, without it breaking out to the upside, then I would expect to play it to the downside. And I would expect shares to pull back from there.
But it will be something to keep an eye on. This is kind of the key resistance level to watch. It’s just below $80 a share. This is just a rising trendline. It’s a little steep. I’m not expecting too much from it. It could break through it and that’s okay. I’m not going to trade on this trendline. I like the horizontal support and resistance lines, or flatter trendlines that you can use to tell you when to trade the stock. So for now, Starbucks is going to be on my #TankIt list. I think it’s going to go lower.
Agilent Technologies Stock
Agilent stock is trending higher. The unique thing that you notice on this stock when you look at it is that the pandemic that we had, the massive sell-off, doesn’t really stand out on its price chart. It’s just such a volatile stock. It’s been whipsawing back and forth, back and forth. So it’s great to see that something like that really doesn’t disrupt it that much. It’s not like it plunged down to $10 a share or anything like that. This company is holding up. Investors are still banking on it. It’s back to near its 52-week highs. So, that’s bullish. So this is going to be a #BankIt stock.
It’s hard to trade here. Again, you’re trying to trade on momentum. Of course, we wanted to push to the 52-week highs to get to new levels. That would be a bullish sign. If it fails to do that, then you want to look out. I wouldn’t mind jumping into the stock, playing the upside and just keeping a tight stock. As soon as you see some weakness, just close it out. Because this stock’s got to consolidate here at some point before it starts to trend in a new direction. But you see the volatility here. It could definitely pull back just as easily as it could rip higher.
It’s hard to trade. It’s definitely a #BankIt stock. That means I’m only going to try to trade the upside swings. Right now, it’s a momentum play. You just want to see it to continue to climb higher with the momentum that it’s building.
Another company we’re going to look at is Intel. This one, it’s a chip stock. They’ve had a lot of competition from Advanced Micro Devices, Micron, these younger companies that are coming in with less issues. They’re not a giant chip stock like Intel, but they’re still benefiting, they’re still riding the wave of artificial intelligence and pretty much everything. Chips are going in all these devices. You can see that just over the years, they continue to win out and they continue to benefit.
What’s interesting with this stock is that we had this consolidation period here after the bounce from the pandemic. After the global shutdown, it started to rally. It had this consolidation period in this green support area, and now was the previous resistance. It would have been red, acting as resistance as it was consolidating, then it broke out above that. Now it’s holding above that, which is bullish. So it’s definitely a #BankIt stock. I’m looking for it to go higher from here, and that green line on the chart is going to be my key level to watch. If it closes below that, then I’m just closing out my bullish position. I want to trade this to the upside. It’s a #BankIt trade. We want to add call options. We’re just expecting it to hold above that horizontal support line right there.
Another company we’re going to look at is Sony. Gabriel wanted us to take a look at this one based on the PlayStation 5 coming out in December. I looked back on its chart and that’s not too much of a factor really.
It’s not a catalyst event that is going to send the stock soaring or falling based on how it’s read.
It could be a momentum shift, whereas we see it consolidating now. The fact that that’s coming out, but it’s not coming out to the end of the year. So you’re going to see some volatility from now until then. It could go either way based on how it’s sitting.
With all the recent news, it’s been positive for the video game industry because these kids are just turning into little gamers all of a sudden, and it’s going to stick with them. They’re not going to be playing as much, but their passion for video gaming, their passion for being online and chatting with their friends while they’re interacting with these games, is really going to stick with them. It’s something they’ll continue to do for years.
I think the Playstation 5 will be a hit. People are going to love it, and they’re going to buy it up. So I definitely think it will be a bullish play on that. Sony is a #BankIt stock. The platforms right now are still winning out. Until the platforms start to change and you see some disruption in that area, then I may change my mind. But for now, there’s really no competition here for the three major ones: the PlayStation, the Xbox or the Nintendo Switch. So we’re going to take this as a #BankIt trade.
Right now, it’s just consolidating. It’s a little wide in the consolidation, but if you want to go bullish here, it’s a great opportunity. If it closes below the 200-day moving average, then I would exit my bullish trade because the pullback could be pretty sharp and last for a couple of more months.
So I would trade the upside moment. I’m expecting this stock to continue to climb over the next few weeks based on the positive news from the video game industry.
Barrick Gold Corp. Stock
Then, our last stock here is Barrick Gold Corp. This is a gold miner, and gold has been doing well. You can see that they had a nice breakout here after the pandemic.
They were a safety play for the gold positions. And people really enjoyed it. Investors loved them, bidding the miner way up. Then it started to consolidate, started to pull back, which you love seeing at this point. It started to pull back, which is great news.
When you look at Tesla and Agilent, which had just ripped higher, the dominant question is, “When do I buy?”
Well, Barrick Gold Corp. is giving you that opportunity to buy today. It pulled back, it tested this green support line that I have. It was resistance here on the uptrend. Now that we broke out, it’s acting as support. Now it can just bounce off this and continue to soar higher.
If it closes back below this, then I would exit my bullish position. But I want to trade this. It’s a #BankIt stock. I want to make a bullish trade, so I’m expecting Barrick to head higher. As long as it stays above this green support line, I’m bullish on the trade.
That’s all for my Quick Stock Takes today.
Chad Shoop, CMT
Editor, Quick Hit Profits