Top 3 Stocks to Watch in March 2023
Top 3 Stocks to Watch in March 2023
Market Update: S&P500 up 3.68% year to date
The SPDR S&P 500 ETF (SPY) is currently trading at $398.65, up 3.68% from its opening price of 2023. In late January of 2023, price action broke through the $400.00 resistance barrier and continued to $418.40, where it found selling pressure.
The SPY’s high watermark of the year was reached on February 2nd and since then we have retreated to the $400.00 price level. This previous resistance level is now being tested as support. Last week the SPY dipped down to $393.64. If we continue to see selling pressure, price action will maintain its bearish stance. If that happens, look for price to test the $387.70 price level for support.
If SPY finds and maintains buyers at its current level this week, just below $400.00, then expect price action to push higher and eventually seek out a new high for the year. The nearest resistance band above current price is around $409.42. Price action would have to break through this resistance before pushing to new highs for this year.
Top Stocks to Watch in March
- JD.com Inc. (JD)
- PDD Holdings Inc. (PDD)
- Carnival Corp. (CCL)
.png?format=pjpg&auto=webp&quality=50&width=30&disable=upscale)
JD.com Inc. (JD)
Earnings Date: March 9th, 2023 (Before the open)
JD.com, Inc. operates as an online direct sales company in China. JD.com, Inc. is based in Beijing, China. Through its website www.jd.com, and mobile applications, it provides e-commerce platforms for business and consumers.
JD.com currently operates in the E-commerce, Artificial intelligence, Robotics, and Autonomous Vehicle industries. JD continues to develop its global presence, currently operating in Brazil, Cambodia, Chile, China, Denmark, Ecuador, Finland, Indonesia, Laos, Norway, Peru, Sweden, Switzerland.
JD is currently trading at $44.64, down 22.99% from its opening price of 2023. The last five quarters of earnings reports have been mixed. Three net loss quarters followed by two recent net gain quarters. Since JD has had mixed results recently when it comes to earnings, it continues to create uncertainty in the market and as a result we tend to see larger corrections post earnings announcements, as the market reassesses its value.
With that in mind, we take a look at the options markets in JD. March options are tight at $0.01 to $0.02 wide in some strikes, and very liquid. On March 9th the March contracts will be 7 days out, which may be too much risk for some to take the trade. However, if you want to stay defined and have the option to roll out to April contracts, then March contracts would be a good option for earnings plays.
.png?format=pjpg&auto=webp&quality=50&width=30&disable=upscale)
PDD Holdings Inc. (PDD)
Earnings Date: March 20th, 2023 (Before the open)
Pinduoduo Inc. provides an e-commerce platform allowing users to participate in group buying deals, primarily through Tencent's Wechat app. Pinduoduo Inc. is based in Shanghai, China.
PDD is currently trading at $86.23, up 0.84% from its opening price of 2023. The last five quarters of earnings reports have been net positive. In late 2021 and early 2022, PDD was spending more cash than it was retaining. However, the last two quarters have returned to positive net cash flow.
Since PDD announces earnings on March 20th, we will use April’s contract for earnings plays. Options markets in April are about $0.10 wide. April contract strikes are currently $5.00 wide but expect them to introduce $1.00 wide contracts as we get further into March.
If you are comfortable with delta-neutral undefined positions, a strangle going into earnings with very wide strikes could work well since there is a lot of premium to be collected around one standard deviation away or further.
.png?format=pjpg&auto=webp&quality=50&width=30&disable=upscale)
Carnival Corp. (CCL)
Earnings Date: March 28th, 2023 (Before the open)
Carnival Corp. operates as a cruise and leisure company. Carnival Corporation & Carnival plc form the largest cruise operator in the world. The company operates on North America, Australia, Europe and Asia. The company's brands include Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises (Australia), Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard.
CCL is currently trading at $10.85, up 31.67% from its opening price of 2023. The last five quarters of earning reports have been net negative. Cashflow has also been net negative for the same period. However, sales are trending up and net losses appear to be shrinking as well.
The advantages of trading CCL options going into earnings are the tightness of the markets, which are a penny or two wide in March and April contracts, and the size of the product. Since CCL is trading around $10, the price of options is relatively cheap, allowing us to place small trades.
Wide spreads in and out of the money can work well if you have a directional bias. CCL also lends itself to small undefined risk positions. However, keep in mind that the price of a cheaper product like CCL can move a lot after earnings. Expect that price will test your strikes and that you’ll have to defend your position as some point during the trade.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.