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RoboStreet – August 20, 2020
Remote Economy Thrives Amidst Slow Progress On Pandemic
While the weekly data on the coronavirus is incrementally improving, there was a much higher level of optimism just a couple of weeks ago about the ability for life both at home and at work would normalize. There was a burst of momentum in the epicenter stocks that saw a rapid shift out of leading growth stocks, but the rotational move lost steam.
As fresh pessimism crept back into the market following reports of COVID-19 outbreaks at certain universities upon students returning, investors are now rethinking their optimism and looking to up their exposure to the work-from-home stocks. But first, let’s take a quick check of the market landscape to size up if stocks are on good footing.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
After the FOMC meeting, all the sectors sold off and potentially could be a catalyst for a 2-5% correction in the next two weeks. Treasury prices continue to build the bottom (the TLT traded below 50 days MA) and the DXY continues to go through the bottom building process, shortly breaking current support at $92.50.
My opinion has not changed. I do not think SPY and QQQ will be able to break through the overhead resistance in the next 2-4 weeks. The short-term bottom is at $310 and potentially can be retested most likely in August (put/call ratio is at the lowest point this year). A pullback would be a healthy event to relieve the current overbought condition.
SPY longer-term overhead resistance is at $340. I would be a buyer using any short-term corrections, but would not chase the stock market at these levels. My strategy is to buy 5-10% market corrections. Based on our models, the market (SPY) will trade in the range between $300 and $340 for the next 4 weeks.
With the renewed interest in remote economy stocks, investors may want to consider a diversified approach to this theme. One place to look is the Direxion Work From Home ETF (WFH) with exposure to those companies that stand to benefit from an increasingly flexible work environment.
The four focus sub-sectors include Cloud Technologies, Cybersecurity, Online Project and Document Management, and Remote Communications.
For those looking at trading individual standout stocks in the work-from-home sector, take a hard look at Docusign Inc. (DOCU), one of the hottest stocks year-to-date. The company is a leader in cloud-based digital documents that provide e-signature solutions that enable businesses to digitally prepare, execute, and act on agreements
When my AI-driven Stock Forecast Toolbox is applied, we get a 6-month predicted resistance price of $307.14. With the stock currently trading at around $215, this price target represents 42% of potential upside.
Revenue for Docusign is forecast to soar by 35% in 2020 to $1.2 billion and earnings to leap by 54% to $0.48 per share this year and accelerate by 72% to $0.83 in 2021.
Docusign Inc. could make for a fine addition to our RoboInvestor Portfolio, but as I noted above, the market is short-term overbought and we don’t chase stocks that are extended. In fact, I’m looking to trim a number of positions we have unrealized gains in stocks like Abbott Labs (ABT), Workday Inc. (WDAY), CSX Corp. (CSX), Kimberly-Clark Corp. (KMB) and SPDR Gold Shares ETF (GLD).
Every trade I recommend for our RoboInvestor advisory service is vetted by my AI tools that provide specific entry and exit points that have proven invaluable in a market fraught with uncertainty. Those RoboInvestor members that have been with us since our launch in April 2018 have seen their capital grow by over 40%, fueled by a Winning Trades Percentage of a stunning 89.10%.
Our AI platform is making money roughly 9 out of every 10 times our members put their capital to work. And we only use highly liquid blue-chip stocks and ETFs to trade all market sectors, equities, indexes, currencies, commodities, and volatility. We will invest on both the long and short side, wherever our AI indicators point us to go.
Our approach to asset selection is unrestricted, which makes our system very unique and highly opportunistic. Join RoboInvestor today and make tomorrow a brand new and exciting investing experience. All that is required by being a member is to act on our alerts and click a mouse. We do all the work and we’re proud to be delivering a clear and decisive path to serious wealth creation.
“I’m investing my own money in each and every stock as my AI platform identifies.”And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
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