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Natural gas prices are sitting at seven-year highs.

Not only is gas demand rising, supplies are running low, creating a crunch. In fact, according to Barron’s, there’s 17% less gas in storage year over year, and 7% less than the five-year average. Part of the reason for that is Hurricane Ida, which knocked out a good deal of gas production.

If you believe natural gas prices could move even higher, wait for related stocks to pull back.

Right now, most are overbought, and over-extended, including Chesapeake Energy (CHK), EQT (EQT), Cimarex Energy (XEC), and Antero Resources (AR). All could come down, near-term.

For example, look at a two-year chart of Chesapeake Energy (CHK), with RSI, MACD, Bollinger Bands (2,20), and Williams’ %R. Not only is the stock overbought at its upper Band, it’s excessively overbought on RSI, MACD, and Williams’ %R.

From a current price of $60.85, it could pull back to prior support just under $56.

Again, if you’re thinking of going long natural gas stocks on shortages, wait. Most of these natural gas stocks have become wildly overbought.

Or, pull up a two year chart of natural gas, applying the same technical indicators. You can see that every time these indicators align in overbought or oversold territory, natural gas prices tend to pivot in the other direction shortly after.

The post Don’t Chase Higher Natural Gas Prices Just Yet appeared first on Morningology.

Solar stocks, like First Solar (FSLR) are shining bright.

All after the White House said it wants solar to account for nearly half of electricity supply by 2050. At the moment, solar powers about 3% of the grid, says CNBC. By 2050, it could be up to 45%. All in an effort to decarbonize the energy industry.

According to Energy.gov:

“The U.S. Department of Energy (DOE) today released the Solar Futures Study detailing the significant role solar will play in decarbonizing the nation’s power grid. The study shows that by 2035, solar energy has the potential to power 40% of the nation’s electricity, drive deep decarbonization of the grid, and employ as much as 1.5 million people—without raising electricity prices. The study’s findings call for massive and equitable deployment of clean energy sources, underscoring the Biden Administration’s efforts to tackle the climate crisis and rapidly increase access to renewable power throughout the country.”

Fueling green energy solutions, world leaders are also pushing for less emissions.

The U.S. just pledged to reduce emissions by up to 52% over the next several years. Europe wants to cut CO2 emissions by up to 55% by 2030.

China says it’ll stop releasing CO2 in the next 40 years.

In short, it may not be a good idea to bet against green energy stocks.

 

The post President Biden Says Solar Could Produce Up to 45% of Electricity by 2050 appeared first on Morningology.

The “Buy Now, Pay Later” boom is booming.

Weeks ago, Square announced it was buying Afterpay in an all-stock transaction worth $29 billion. And all as “buy now, pay later (BNPL)” just begins to gain popularity.

Shortly after that, Affirm Holdings (AFRM) entered into a partnership with Amazon.com.

Then, just this morning, PayPal announced it would buy Japan’s Paidy for $2.7 billion, pushing it further into the BNPL market with a focus on Asia.

Moving forward, we could see even more BNPL M&A and growth.

There’s plenty to get excited about here.

For example, according to Barron’s, “BNPL is gaining popularity given that interest rates are ultralow, reducing costs for consumers. Other fintech apps have entered the market, including Affirm, a pure play on the sector, and PayPal (PYPL). Apple (AAPL) is also developing a BNPL service with Goldman Sachs Group (GS), its credit-card partner.”

In addition, in the first two months of the new year, BNPL saw 215% year over year growth, as noted by Adobe. Even better, according to Bank of America, BNPL apps could grow 10-15x by 2025, and could eventually process $650 billion to $1 trillion in transactions.

Analysts appear excited about BNPL, too.

BNPL could become a massive $20.4 billion market by 2028, according to Grand View Research. Zion Market Research says it could be worth nearly $40 billion by them. Then there’s Allied Market Research, which believes the global BNPL market could be worth $3.98 trillion by 2030.

“Affordable and convenient payment services of buy now pay later platforms and growth of the e-commerce industry across the globe drive the growth of the global buy now pay later market. Increase in demand for delayed payments for online purchases and upsurge in spending on luxury products among the adult population present new opportunities in the upcoming years,” notes Allied Market Research.

In short, investors may not want to miss out on the BNPL boom.

The post The Top Reasons to Jump Into the BNPL Boom Now appeared first on Morningology.

Markets are hitting new all-time highs.

Overly optimistic investors are pouring millions into the markets on the idea we’ll see higher highs. They’re not worried about pullbacks or the unjustifiable valuations.

Most are just piling in with the herd. But what many of them fail to understand is that today’s set up is eerily similar to that of 1929, 2000, 2008, and 2020.

In 1929, rampant speculation sent the Dow Jones up 300% between 1923 and 1929. Speculation forced stocks to unbelievable highs with unjustifiable valuation. Then, it all fell apart. Between 1929 and 1932, the Dow Jones lost 86% of its value.

In 1987, Black Monday unexpectedly struck.

In 2000, dot-com optimism sent the Dow Jones to nearly 11,750 until unjustifiable valuations and greed sent it back to a low of 9,731.

In 2008, rampant speculation sent the Dow Jones to a high of 14,038 on the heels of a housing boom. Americans were buying homes they couldn’t afford. Stocks were exploding on economic optimism and unjustifiable valuations, just like in 1929 and 2000.

Then it all fell apart. The Dow Jones would sink to 6,500.

In 2020, markets would crash again thanks to that pesky coronavirus.

Prior to those crashes, the Shiller P/E ratio warned us of an impending crisis.

According to Investopedia, “The P/E ratio is a valuation metric that measures a stock’s price relative to the company’s earnings per share. … The ratio is generally applied to broad equity indices to assess whether the market is undervalued or overvalued.”

In 1929, the Shiller P/E ratio stood at a high of 30 – the highest read at the time. By 1987, the Shiller P/E rallied to a high of about 17 before the crash. By 2000, the Shiller P/E was up to nearly 45. As of today, the Shiller P/E is at its second highest high of 39.17.

In short, per the Shiller P/E ratio, we’re overdue for a severe pullback.

Just be prepared for it – and try not to get caught up in the hysteria.

The post This Number Hasn’t Been This High Since the Crash of 2000 appeared first on Morningology.

A few keystrokes are all it takes.  

All of a sudden, your most private information is in the hands of criminals. Your most personal information, banking details, social security numbers, your children’s information.  

Already, our digital over-dependence means that our risk is greater than ever before with new attacks surfacing all the time.  Just in case you think hackers can’t get to you, it’s already happened. They’ve already been in your computer, accessing your most vital information, as we’ve said many times.

Even Yahoo Finance just said it.

“The answer is yes, you’ve been hacked,” NYU Tandon School of Engineering professor Justin Cappos told Yahoo Finance. “Your data, and everyone else’s, is probably out there from one data breach or another.”

• In one of the biggest data breaches in history, more than 100 million Capital One customer accounts and credit card applications were once hacked. In fact, according to CNN, Paige Thompson is accused of breaking into the company’s server and accessing 140,000 social security numbers, a million Canadian insurance numbers, and 80,000 bank account numbers.
• In 2020, hackers accessed data for 2.5 million customers of the Drizly app.
• In late August 2021, the U.S. State Department was hit with a cyberattack.  In fact, according to Sam Curry, chief security officer at Cybereason, as quoted by Infosecurity-Magazine.com, “The recent cyber-attack against the U.S. State Department is a reminder that anyone and everyone can be hit and will be hit.
• Even major companies are getting hit.  T-Mobile for example said hackers stole data of about 50 million people.  Major companies, like Colonial Pipeline were taken down by a remote account with compromised VPN, or virtual private network password.

That’s not even 1% of the cyberattacks we’ve faced.

Yahoo Finance offers a few suggestions on how to protect your data here.  From an investing standpoint, cybersecurity stocks will continue to benefit from the threat, including:

Global X Cybersecurity ETF (BUG)

“The Global X Cybersecurity ETF (BUG) seeks to invest in companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is in the development and management of security protocols preventing intrusion and attacks to systems, networks, applications, computers, and mobile devices,” says Global X.

Over the last several months, the BUG ETF exploded from about $24.50 to about $32.  From here, we could see a potential test of $40, near-term, as the cyber situation intensifies.  Some of the ETFs top holdings include Fortinet, Crowdstrike, Palo Alto, Okta Inc., and Rapid7 Inc. to name a few.  What’s nice about an ETF is that it offers a good deal of exposure at less cost.

If I wanted to buy 100 shares of the BUG ETF, it would cost me $3,200 – and give me exposure to dozens of stocks.  If I were to buy 100 shares of even 50% of the BUG ETF holdings, it would cost be tens of thousands of dollars.

iShares Cybersecurity and Tech ETF (IHAK)

According to iShares, “The iShares Cybersecurity and Tech ETF seeks to track the investment results of an index composed of developed and emerging market companies involved in cyber security and technology, including cyber security hardware, software, products, and services.”

IHAK ran from a low of about $38 to $45 over the last few months on the cyber threat.  From here, it could see $60 a share.  Some of its top holdings include Zscaler, Fortinet, Docusign Inc., Okta Inc. Proofpoint Inc., and Palo Alto.  

FireEye (FEYE)

FEYE is one of the top cybersecurity stocks to consider.

At the moment, FireEye, Inc. provides intelligence-based cybersecurity solutions to prepare for, prevent, investigate, respond to, and remediate cyber-attacks in organizations. Its FireEye products include network, email, endpoint, and cloud security control products to detect and prevent threats; Dynamic Threat Intelligence Cloud, a bi-directional cloud-based service; Helix Security Operations Platform, a cloud-hosted security operations platform; Cloudvisory cloud security products; and customer support and maintenance services. 

Plus, insiders are buying.  Executive Vice President and Chief Revenue Officer, William Robbins bought $440k worth of the stock.  In addition, over the last year, President and COO John Watters bought $469,000 worth at $18.75.

The post You’ve Already Been Hacked – And It Could Easily Happen Again appeared first on Morningology.

The electric vehicle boom is accelerating faster than anyone thought.

So much so, analysts at UBS say EVs could penetrate up to 100% of the auto market by 2040. Even Bank of America just said there is a “looming threat of the global battery supply for electric vehicles running dry by as early as 2025.”

“BofA expects global battery shortages to intensify further in the period between 2026 to 2030 due to a continued rise in EV penetration across all markets, reflecting an “incrementally bullish” outlook for the EV industry. BofA lifted its estimated global penetrations for all EVs, including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), to 23%, 40%, and 67% for 2025, 2030, and 2040, respectively,” added Yahoo Finance.

If it happens, it’ll be a massive problem for automakers that want to shift to all-electric fleets, and governments around the world that want millions of EVs. President Biden for example wants half of all new cars sold in the U.S. to be electric by 2030.

As a result of the supply-demand issue, some of the top stocks to consider are Panasonic (PCRFY), which will supply batteries to Tesla through 2022, BYD Company (BYDDY), Lithium Americas (LAC), Enersys (ENS) and QuantumScape (QS) to name a few.

“Automakers with relatively short timetables to be electric-only include Volvo, Jaguar, Volkswagen (in Europe), Bentley, Lotus, Cadillac, and, as an aspiration, all of General Motors. GM has said it will have 30 EVs on the market by 2025, 20 of them for sale in North America. Startups ready to deploy EVs include Rivian, Lucid, Bollinger, and Fisker. That’s a lot of electric cars, and that means a lot of batteries. Will the packs and cells be ready to slot into the vehicles? An impressive array of experts say maybe not,” added Auto Week.

Unless there’s a near-term solution to the potential shortage, this could put the brakes on the electric vehicle industry.

The post Trading Opportunity: Battery Shortage Could Put the Brakes on EVs appeared first on Morningology.

Biotech is one of the hottest sectors to invest in.

For one, by 2028, the market could be worth up to $2.44 trillion, says Grand View Research, thanks to new innovation, treatments, rising demand, and aging populations.

Plus, there’s the pandemic that doesn’t want to slow down. In fact, “The emergence of the SARS-COV-2 infection is driving the market. Companies are developing new solutions for combating the pandemic situation,” added Grand View.

Two, according to Global Market Insights, “An increasing number of chronic diseases including cancer, heart disease, stroke, asthma, chronic respiratory diseases and hypertension among others will positively influence the biotechnology market growth. Unhealthy diet and lifestyle habits including alcohol consumption and tobacco are among the major reasons for the increase in the prevalence of chronic diseases.”

Three, there’s incredible new innovation, creating new life-saving opportunities. Plus, we can’t forget that big pharmaceutical companies are buying smaller biotech companies to keep their pipelines full.

Some of the hottest stocks you may want to still consider are:

Moderna (MRNA)

After pulling back from $497 to $375, the stock is just beginning to pivot higher, and could retest its prior highs. Helping, the company just initiated its submission process for US FDA approval of its CV-19 booster shot.

According to Barron’s, “The company said the submitted data showed that the booster dose at the 50 ug dose level induced ‘robust antibody responses against the Delta variant.’ Moderna expects to submit data to the European Medicines Agency and other regulators.”

Axsome Therapeutics (AXSM)

AXSM gapped from $50 to about $20, and is just starting to pivot higher. There’s a chance it could eventually refill its gap, especially with three planned New Drug Applications for depression, migraines, and the treatment of fibromyalgia. Reportedly, all three already met their primary endpoints in Phase 3 trials.

Fate Therapeutics (FATE)

Fate Therapeutics (FATE), which has become aggressively oversold. I like this stock for two reasons. One, it’s oversold at double bottom support dating back to June. Two, after the stock gapped down, RSI, MACD, and Williams’ %R all sipped into oversold territory.

In addition, Piper Sandler analyst Edward Tenthoff recommends using the selloff in Fate Therapeutics following the updated B-cell lymphoma data as a buying opportunity. The analyst sees “impressive” activity and notes that five of eight FT516 plus Rituxan responders reported at ASCO remain on therapy for 4.6-9.5 months.

The post Three Oversold Biotech Opportunities You May Want to Consider appeared first on Morningology.

Five Below (FIVE) just fell out of the sky on earnings.

Net earnings came in at $64.8 million, or $1.15 a share from 53 cents year over year. Analysts were looking for $1.11. Unfortunately, the company missed on sales of $646.6 million, as compared to expectations for $658 million. Same store sales were up to 39.2%.

For the third quarter, the company sees EPS of between 23 cents and 30 cents a share on sales of $550 million to $565 million. However, with “uncertainty related to COVID-19, potential future shifts in consumer spending, and ongoing global supply chain disruption,” it did not provide full-year guidance.

Despite the bad news, analysts advise using weakness as opportunity.

Jefferies’ analyst Randal Konik for example reiterated a buy rating, with a $300 target. As noted by Street Insider, “The analyst suggested investors Buy the Dip stating, ‘What matters is 1) comps were up big (+21% vs. ’19), 2) new store growth remains high (near mid-teens% YoY), and 3) Q3 outlook appears inline to slightly better.”

Goldman Sachs analyst Kate McShane also reiterated a buy rating with a $236 target. The analyst added, “We continue to like FIVE given its differentiated treasure hunt offering that is resonating well with customers, supporting strong unit growth potential, while the company also seems to be better positioned with respect to freight exposure vs retail peers,” as also noted by Street Insider.

At the moment, FIVE is a falling knife.

If you’re thinking of buying on weakness, wait for FIVE to bottom out first. Also, wait for confirmation that the pullback is over. The last thing you want to do is buy too early.

The post Crisis and Opportunity: Why Analysts are Still Bullish on Five Below appeared first on Morningology.

One of the best ways to find opportunity is to spot “blood in the streets,” we said August 5.

• Warren Buffett says, “Be fearful when others are greedy and greedy when others are fearful.” 
• Sir John Templeton once said, “Buy at the point of maximum pessimism.”
• Baron Rothschild would say, “Buy the blood in the streets, even if the blood is your own.”

That’s because fear often breeds opportunity.

Nowadays, ARK Invest’s Cathie Woods seems to like it, too.

For example, after Robinhood (HOOD) plunged, ARK Invest bought $45 million worth in late July, and watched It pop to a high of $85 before it fell apart.  On August 5, her firm bought 2.47 million shares of Zymergen (ZY), and is watching as the stock slowly recovers lost ground.

This morning, Cathie Wood’s firm bought $56 million worth of Zoom Video (ZM) on an earnings-induced dip.  In fact, according to the New York Post, “Ark’s flagship ARK Innovation ETF snapped up 157,000 Zoom shares valued at about $45.5 million, company records show. The ARK Next Generation Internet ETF also added 37,000 shares worth roughly $11 million.”

All after Zoom said it brought it $1.02 billion in revenue, adding that it expected for revenue to remain flat to slightly down in the current quarter. 

In its latest press release, Zoom noted that:

• Third Quarter Fiscal Year 2022: Total revenue is expected to be between $1.015 billion and $1.020 billion and non-GAAP income from operations is expected to be between $340.0 million and $345.0 million. 
• Full Fiscal Year 2022: Total revenue is expected to be between $4.005 billion and $4.015 billion. Non-GAAP income from operations is expected to be between $1.500 billion and $1.510 billion. 

That was enough to send  ZM from a high of $340 to an oversold low of $290.70, where it appears to have caught support.  That, and RSI, MACD, and Williams’ %R are all severely oversold.  

Woods doesn’t appear to be the only bull.

As noted by TheFly.com, “RBC Capital analyst Rishi Jaluria keeps his Outperform rating and $450 price target on Zoom Video after the company reported a ‘solid’ quarter but guided Q3 and Q4 flat sequentially, sending the stock down sharply after hours. Jaluria adds however that the guidance looks ‘conservative’ as he was encouraged by the commentary around Zoom Phone and the company’s large customers. The analyst further states that he continues to like the long-term potential of Zoom to become a ‘broader platform.’”

The post This May be the Next Big “Blood in the Street” Opportunity appeared first on Morningology.

There’s speculation the next Apple iPhone will be equipped with satellite service.

According to Barron’s, “MacRumors reported Sunday that Ming-Chi Kuo, an analyst with TF International Securities known for tapping contacts in the Asian supply chain for insights about Apple products, believes that the iPhone 13 will use a Qualcomm (QCOM) chip that supports low-earth-orbit satellite communications.”

Other space technology stocks—like Globalstar (GSAT) and Iridium Communications (IRDM)—also ran higher on Apple speculation, too.

However, it may not be a good idea to chase those stocks, or the story.

According to a Bloomberg report, Apple’s potential iPhone connectivity may be limited to emergency calls at the start. “One feature, called Emergency Message via Satellite, will let you text emergency services and emergency contacts when you don’t have a cell signal by harnessing a satellite network, according to Bloomberg, as noted by The Verge. ”Another feature will let users report emergencies.”

Also, as noted by The Verge, “a source tells Bloomberg that the new features probably won’t be ready before next year, throwing cold water on the idea that you might be able to use them as soon as you buy the next iPhone.”

The realization may be why shares of IRDM are pulling back about $3 the moment. Even shares of GSAT are currently pulling back.

The post Don’t Buy Into the Apple Satellite Service Hype Just Yet appeared first on Morningology.