Workday for the win! Last week, I traded WDAY and LOW. Here’s what my trade entries looked like:
… and here are the results!
Workday provides human resource management, financial management, and customer retention management software services, and their client base has actually grown during the pandemic as various online companies have sprung up. Although these might not be permanent revenue boosts to the company, there could be significant gambling activity based around an earnings surprise. On any lockdown or stimulus based news we could see a price pop in Workday driven by a boost to tech across the board as the Nasdaq re-tests all-time highs.
Technical analysis showed WDAY shares bouncing up from technical support levels right at the $216 per share amount. I was looking to catch these options at the closing price for Thursday, and then ride it back up along the trading range to sell above $222 before their earnings call.
The Week Of November 8, 2020
We’re back! Now that the political uncertainty of a presidential election is behind us, I expect that stock market gambling behavior will be based around more predictable news events. This week started off with incredible news about the Pfizer vaccine’s 90% effective rate, which caused the rally from last week to carry over another day. However, stocks have sold-off throughout the week, testing key 20-day support levels on Thursday. Re-opening stock predictions are starting to make sense again as investors begin to look beyond the current spike in Covid-19 cases. Although stay-at-home advisories are being issued again in large cities, for the most part, mask use is expected to be the primary deterrent of viruses throughout the winter season, and the economy is expected to pick up again next year.
Weekly jobless claims came in at 709,000, continuing their downward trend, and showing that hiring is resuming for the holiday season. The economy grew over 30% in the last quarter for the strongest quarter in history, however this was an expected rebound after GDP fell by over 30% in the previous quarter. Retailers are continuing to expand their online sales and distribution capabilities to adjust to our new reality. The Dollar Index fell this week as stimulus talks come back into focus, expected at the least by early next year, and as the FED and global banks continue to push low interest rate policies to fight deflation. Although stagflation is now considered to be a potential side effect of current policy, this environment would still be bullish for stocks and other real assets. The S&P 500 closed with gains 2 out of the last 5 trading days, and has been consolidating after reaching new highs early in the week.
Our outlook into the weekend is bullish after we’ve consolidated from the huge rally based on the vaccine news. The market indexes have tested recent lows, and could make another push towards all-time highs next week. As we move past the election and into the holiday season, I believe we can expect things to behave a little bit more predictably than they have so far this month.
REMEMBER to only open positions that fit within your own personal risk tolerance, and NEVER ‘CHASE’ trades that you missed a good entry or exit on. There will be another opportunity for you just around the corner.
Photo Credit: etftrends.com, lowes.com, nbcnews,com, marketwatch.com, blog.workday.com