With the Holiday Season festivities in full swing, this week, let’s take a breather from introducing a new Top Pick Tuesday. Instead, let’s recap by revisiting our November 2023 Top Pick Tuesday ideas. Surprisingly, despite the short interval since their introduction, the results have been unexpectedly noteworthy. So, let’s not delay any further and get into it!
Pick #1 – Unity Software Inc.
Unity Software Inc. (U:NYSE)
Price at Preparation: $28.16 (Nov 13, 2023)
Price at Update: $39.36 (Dec 15, 2023)
Gain/Loss: +40%
Update
Unity Software Inc. (U:NYSE) emerged as a top pick following what we perceived as an over-reaction to their Earnings Report, coupled with the buzz around their CEO’s departure and a swiftly resolved pricing hiccup. Referencing the visual chart, the blue vertical line marks the preparation of this pick. The chart vividly illustrates a rapid 40% surge in the stock price, validating the initial opinion. Now positioned at the second target, historically this a challenging level to breach and caution becomes crucial. While securing profits is prudent, manage risk and retain a portion of the position aiming for the final target.
The outlined plan entailed utilizing a Covered Call (CC) strategy, albeit risking profit limitations. Indeed, this strategy may have capped profits for the held CC. At this point, traders find themselves at a profitable crossroads—content with their gains, they can pivot towards researching and planning the next addition to their portfolio or revisit and adjust their strategy.
Pick #2 – LVMH
LVMH Moët Hennessy Louis Vuitton SE (LVMUY:OTC)
Price at Preparation: $155.85 (Nov 15, 2023)
Price at Update: $162.47 (Dec 15, 2023)
Gain/Loss: +4%
Update
The pick of LVMH Moët Hennessy Louis Vuitton SE (LVMUY:OTC) was rooted in the anticipation of robust End of Year Holiday spending, especially after confirming a bounce off the indicated support line showcased in the chart. Merely a month has passed, and the stock has risen by 4%, surpassing the initial target at $159, now enroute to the second target set at $175. Revisiting the original trade plan, it envisioned a potential timeline extending until January 25th, 2024, capitalizing on the run-up to the company’s upcoming Earnings Report, complemented by the potential secondary catalyst of Chinese New Year in February 2024.
Just as in all trades, once targets are met, it’s prudent to lock in some profits while setting sights on the next target. Simultaneously, safeguard against potential downsides by actively managing the trade. Employing a stop-loss strategy stands as one viable method, adjusting as the price ascends. For this scenario, the new stop-loss would align with the first target mentioned above.
Pick #3 – Novo Nordisk
Novo Nordisk A/S (NVO:NYSE)
Price at Preparation: $103.26 (Nov 22, 2023)
Price at Update: $97.10 (Dec 15, 2023)
Gain/Loss: -6%
Update
Diving into the most intricate strategy mapped out, utilizing “Other People’s Money” through Cash Secured Puts (CSP) and Covered Calls (CC) can be complicated. Presently, the Novo Nordisk (NVO:NYSE) stock is down by 6% since we crafted this trade plan, which was the desired goal — a circumstance warranting a revisit to the comprehensive plan outlined in the original article. Upon glancing at the diagram for a visual aid, the blue vertical line marks the preparation of this trade plan. Despite its brief timespan, history has shown to be on our side. While the stock briefly breached the 52-week high, sustaining this level proved too difficult, resulting in a downward slide towards the marked $95 line (1). As per the plan, we are currently navigating part 1 of the plan, leveraging a CSP strategy, capitalizing on premium collection as the stock rebounds from the targeted support line indicated. At this stage, no further intervention is necessary as time chips away at the premium, padding our pockets as the stock price recuperates.
Given the relatively short lifespan of this plan, it’s crucial to bear in mind the discussed risks from the original article, serving as safeguards against losses during a downturn. As of now, optimism prevails—fingers crossed we keep go according to plan!
These trade ideas are merely some examples of what we do. By joining our Theta Bandits Discord community, you unlock more diverse trading methods and ticker discussions as well as further updates to the Top Picks.
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
