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Energy’s Loss Could Be Big Gains for These 3 Names

by | Jun 17, 2022 | Options, Watchlist

Markets got a bounce to end the week as we moved toward the finish line for Friday’s quad-witching…

But one sector lagging behind is one we’ve been watching closely all week — Energy.

Since Tuesday’s feature, the Energy Select Sector SPDR Fund (NYSEArca: XLE) fell another 10%, bringing its slide to more than 21% over the past two weeks.

While some gurus were squawking about how strong the sector was and how traders could  hide out there from this volatility storm, our Project X strategy jumped on a short signal on Warren Buffet’s pet oil stock, Occidental Petroleum Corp. (NYSE: OXY), later that same Monday.

Fast forward to Thursday and OXY shares dropped 6%, allowing the strategy to exit for a solid 25%* return in three days, beating both our average 11-day holding period and clearing our 8% average return — including all winning and losing trades — since inception going back to Feb. 25!

That wasn’t the only short play New Money Crew capitalized on as markets plummeted — our Wiretap Alerts strategy kicked off the week with two fantastic wins on Nikola Corp. (Nasdaq: NKLA) and Pfizer Inc. (NYSE: PFE)!

It’s a great feeling for your trades to finish in the green, especially when the whole market is a sea of red…

And to help us stay on top of these markets, I have a fresh set of names    I’m watching as we head into the three-day weekend with the New Money Crew Weekend Watchlist

New Money Crew Weekend Watchlist: June 17, 2022

You know the talking heads all have “recession” hanging on their lips. Now, I’m not an economist, but from what I’ve seen so far in 2022, they’ve all gotten it wrong.  Now that they’re all saying recession, will they get that wrong, too? I’m looking for opportunities, so what can bounce back? 

Autos, travel stocks… even retailers. 

So leading off the Weekend Watchlist for New Money Crew, we have General Motors Co. (NYSE: GM). Shares are up slightly after dropping more than 8% Thursday. I mentioned in Blitz Daily that we saw some short-term July calls hit the tape, and GM ripped over 3% at one point Friday. 

Institutional buyers are looking for a bounce back in the auto names and so am I. On top of the big GM buy, we also had some Ford Motor Co. (NYSE: F) calls hit. I’m a big fan of the sector here, especially if energy continues to tank and we get a break in gas prices — that would be great news for travel-correlated names like autos. So be on the lookout.

Another area that I see benefitting from a tumble in energy is retail. Specifically, I’m looking at luxury retailers. Last week, we put Nordstrom Inc. (NYSE: JWN) on our radar and the New Money Crew Weekend Watchlist can add another mega luxury retailer — Capri Holdings Ltd. (NYSE: CPRI). Traders want to keep a close eye on the luxury stuff — not the cheap junk out there. We want the Versace’s and Jimmy Choo’s, which is what Capri brings to the fold.

At the start of June, the company murdered its quarterly earnings, beating consensus estimates by 25% with $1.02 earnings per share and a growing profit margin. The earnings event also saw leadership announce a $1 billion stock buyback program. As a result, we’ve seen recent spikes in unusual options activity in the July dated options. 

Outside of luxury retail, I like Amazon.com Inc. (Nasdaq: AMZN) here for the final spot on the New Money Crew Weekend Watchlist. If energy continues to dip, a company with the transportation challenges of Amazon is in line to benefit. 

Shares already gave up all of the gains from the run-up into its split rally, and traders should be watching for a near-term bounce. Thursday saw the company announce the dates for this year’s Prime Day event in mid-July and that’s helped drive a surge of institutional order flow for the king of retailers.  

P.S. Learn how to hack the stock market by “legally spying” on trade ideas from high-profile company insiders…

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*Stated results are typical for given period. Past performance is not indicative of any future results. Trade at your own risk.

WRITTEN BY<br>Lance Ippolito

Lance Ippolito

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