TOP 5 STOCKS TO WATCH THIS WEEK

The podcast provides a technical analysis of five stocks, including DocuSign, Reddit, Cava Group, Target, and MicroStrategy, evaluating their potential upside and downside based on current trends and market conditions. The speaker discusses the risks associated with highly overbought stocks and suggests a cautious approach for investors, particularly with stocks like Reddit and MicroStrategy, which are deemed to have high downside potential due to their leveraged positions and reliance on Bitcoin's volatile price.

DocuSign Earnings

• 00:01:36 DocuSign is set to report earnings, showing bullish signs with higher highs and lows since lows of 47.62. It experienced peak performance during the pandemic but subsequently tanked, leading to a mixed outlook regarding its recovery and potential short or long-term catalysts. The stock is currently overbought, with a 30% potential upside and a 10% downside.

Reddit Stock Analysis

• 00:05:05 Reddit stock has experienced a significant rally from lows of $42 to highs of $140, prompting concern regarding a potential correction due to the rapid price increase. The speaker warns of a high downside risk and believes that those buying at overbought levels are taking a risky position, especially for long-term investors. The speaker suggests taking profits if the stock breaks below the EMA line and the potential for a significant drop to previous lows.

Cava Group Investment

• 00:07:38 Cava Group appears to be a better fit for long-term investments due to its consistent bullish trends over a longer period. While it's currently overbought, as long as it doesn't break below the 135 price and EMA line, it could be a viable long-term option. Since August, it's shown a 66% increase, highlighting its potential for continued growth.

Target's Earnings Impact

• 00:08:56 Target experienced a significant 23% drop after reporting earnings, which presents a potential buying opportunity for investors. The speaker notes a similar pattern in the past where the stock recovered after a downturn, suggesting that a recovery could lead to a 30% ROI. The speaker recommends a cautious approach, potentially adding to positions if it breaks above 134.35 and reducing if it falls back to 120.

MicroStrategy and Bitcoin

• 00:10:38 MicroStrategy's business model relies heavily on Bitcoin's price, as it uses borrowed funds at 0% interest to invest in the cryptocurrency. While the speaker acknowledges the potential for short-term gains if Bitcoin's price continues to rise, he emphasizes the significant downside risk associated with its leveraged position and Bitcoin's volatile history. The speaker cautions against long-term investment in MicroStrategy due to the high risk of a major correction in Bitcoin's price.