The Market Chat’s Richard Moglen joined the Investing with IBD podcast this week to discuss tips he’s learned in his young trading career to help new investors speed up their learning curve. Plus, we look at several potential stock ideas with intriguing institutional sponsorship: DraftKings (DKNG), Pinterest (PINS), and Corsair Gaming (CRSR). DraftKings stock is seeking support at a key level ahead of its Feb. 26 earnings.
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Stocks Slide On Treasury Yields; DKNG Stock Earnings Due
Stocks plunged broadly in the stock market today as investors reacted to a jump in the 10-year Treasury yield. Big names like Boeing (BA), Tesla (TSLA) and Apple (AAPL) took big hits. GameStop (GME) reemerged in the spotlight after a second session of massive share-price gains resulted in several trading halts throughout the day.
The indexes have experienced volatile trading action over the week amid a pullback hitting tech stocks particularly hard. The Nasdaq composite dropped 3.4%, closing below the 50-day line for the first time since Nov. 3.
The S&P 500 and Dow Jones Industrial Average also slid in Thursday’s trading action. The S&P 500 slid 1.4% while the DJI was off 1% by midday.
“I want to see very tight right sides of bases,” Moglen said. “Right now things are wide and loose. There’s no standard bases out there to be found. So I’m being a little bit cautious and really waiting for the ideal setups.”
Meanwhile, more stocks continue to report earnings. DKNG stock is due to release Q4 earnings results Feb. 26. It broke out of a cup-with-handle base in early February and is trying to hold up amid the market pullback. DraftKings is up about 30% so far this year as sports-betting legalization spreads across the country. DKNG stock got a boost earlier this month after ARK Invest announced it purchased shares.
Tips For Novice Investors
In addition to the current market, Moglen outlined several tips for new investors to speed up their learning process. The young trader began his investing career over the last year and has embraced the principles of the CAN SLIM investing system. He also runs The Market Chat podcast where he provides financial literacy and technical analysis geared toward the novice investor.
“Having a set of written rules that describes your entire trading system will guide you into making good, objective decisions,” Moglen said. “And I think a component of a good trading rule set is you have to look at market conditions.”
Moglen added that putting in time over the weekend to conduct research and learning to grade your stocks during volatile periods in the market are also important for young investors to learn.
Listen to the full podcast to hear Moglen’s tips for novice investors to level up their expertise.
Stocks With Increasing Institutional Support
Finally, Moglen analyzed several watchlist stocks showing strong institutional support. These include DKNG, Pinterest and Corsair Gaming stock.
Listen to the full podcast to hear all of Moglen’s stock ideas and analysis, including on software manufacturer ZoomInfo (ZI).
DKNG stock has seen slight pullback action after breaking out of a deep cup-with-handle base. The online sports betting platform cleared a 56.87 buy point with conviction on Feb. 2.
Shares gapped up more than 8% in heavy volume after Cathie Wood’s Ark Invest disclosed a new position of 620,300 DKNG shares at a value of $33.89 million. ARK ETF purchases, especially new or big additions, often spark a lot of follow-on share buying by other investors.
But that gap-up failed to fuel a powerful climb. DKNG stock has pulled back with the broad market. Shares are now trying to hold support near the 21-day line after a successful test of the 50-day line on Tuesday.
“What really caught my eye here is the fund ownership and the quality ownership,” Moglen said of DKNG stock’s institutional sponsorship. He added that DraftKing stock’s recent pullback indicates the stock is taking a much needed rest.
DKNG stock is a buy right now. It’s set to report earnings on Feb. 26. IBD generally recommends investors have a 5% to 10% profit cushion heading into earnings to hold a stock. Those who entered at the traditional 56.87 buy point likely don’t have much cushion. Those who bought the stock on a pullback to the 10-week line in early or late January may decide to hold some shares into the report.
Pinterest stock been on a huge run, finding support near its 10-week line along the way. The social platform jumped as much as 20% in early February after pulling back to that key support level.
Moglen said a “power hammer” off of the 10-week line landed Pinterest on his radar. He added that social media stocks have held up well under current choppy market conditions. Pinterest stock is up 19% for the month and is holding near its 21-day line.
“You’ve got really strong earnings estimates for 2021 and 2022,” Moglen said of PINS stock fundamentals. “There’s price action supporting it. That hammer off the huge reversal after the big drop shows that there’s institutional demand picking up those older shares.”
Corsair Gaming Stock
Corsair Gaming is another name on Moglen’s watchlist. The gaming hardware manufacturer had a huge run out of an IPO base last fall and has been consolidating since peaking in November at 51.37.
Corsair Gaming is now fighting to hold its 50-day moving average. But right now, it’s fighting a losing battle.
Moglen says accelerating earnings growth and strong fundamentals put this recent IPO on his radar.
“It’s kind of in its IPO advance phase still a little bit, and forming its first primary base,” Moglen said of CRSR stock. “It has to really tighten up and form a good low risk entry point before I would be interested but it’s definitely top of my list.”
Interested In DKNG Stock?
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