Portfolio Update 7/30/2021

Good afternoon,

It’s Friday, and I hope you’re excited for the weekend. There’s a reason why I’m excited this morning.

Alpha Pro Tech (APT).

Our most recent trade surged in afternoon trading on Thursday. And it was up another 8.25% after the markets opened. That’s the type of price-strength that I’m excited about. 

For today’s video, I have three major trends that we must watch in the market. Here is a quick recap. 

Market momentum remains negative. The good news is that things are improving. More than 54.5% of companies are still trading under their 50-day simple moving averages. Amazon’s weak earnings report was not as bad as it looks. The company simply invested a lot of money to increase its footprint due to rising demand.

  • The Federal Reserve did not move on interest rates or bond purchases again this week. I’m focused more on the upcoming Symposium at Jackson Hole, Wyoming. That is where I think we’re going to see investors start to worry about rates again. The Fed will have to take its foot off the gas soon. For now, however, we’ll play the waiting game. 
  • China continues its crack down on technology and education companies. Everywhere I go, people are asking me if there is a buying opportunity here. I say no. It’s time to stay clear of Chinese tech companies. I think there is about a 10% possibility we will see Alibaba delisted in the future. 
  • COVID-19 cases are rising across the nation. This feels like what happened last year when the market misjudged the impact. The CDC just said that the Delta variant is as contagious as Chicken Pox. We got into ways to play this ahead of the institutions and speculators.

Portfolio Update

We stopped out of Annovis Bio (NYSE:ANVS). I go into detail in the video on what occurred with the biotech company’s trial data that underwhelmed. I also note that there are two things that I must do moving forward when talking about any stock. 

First, all trailing stops must be between 5% and 7% or have a hard stop number. I extended this to 10% because of the recent volatility, and it should have stopped out on Wednesday. However, there was a cruel irony that it fell 8.5% from the entry price and then experienced this clinical selloff. 

The next note, I’ll only buy biotech stocks moving forward that have positive Insider Buying momentum. If there is no insider buying on a biotech stock, I’ll ignore it regardless of its positive price trend. 

Meanwhile, some notes on our other trades… 

Rocky Mountain Chocolate Factory (NASDAQ:RMCF)

The company just experienced a change at CEO and will split the roles of CEO and Chairman. The stock is ticking a tad lower on Friday due to ongoing weakness in the broader market. Insider buying is positive, and this ongoing activist battle has increased the price-trend of the stock. We’re still holding for now. I’m looking for this stock to break $10. 

MarineMax (NYSE:HZO)

The manufacturer of boats is looking at another strong quarter and has received several upgrades in recent weeks. B. Riley (who I consider to be the best in the business) just set a price target of $65. The stock appears to be consolidating a little, and that will be positive. I think this can breakout higher very soon. COVID didn’t impact this business. Let’s Hold and continue to wait for the move higher. We’re holding the options trade as well.

Co-Diagnostics (NASDAQ:CODX)

The Colorado-based diagnostics company is now a pure-price trend stock. It jumped 6.7% on Friday thanks to concerns about COVID. My argument is simple: Kids are going back to school. We will need significantly more testing. This is a stock that got to nearly $31 last August. I’m not expecting that level again, but I do think that it can get to $15 if testing demand rises. The company produces instant saliva tests for COVID, and as the Delta spreads, I expect it will benefit from government contracts. If people aren’t going to get the vaccine, testing will become the driver of the COVID trade. We did not have an options trade. But we will raise our trailing stop from $8.50 to $9.50.

Alpha Pro Tech (NYSE:APT)

Masks, masks, and more masks. Alpha Pro Tech took off on Thursday afternoon. If you entered this trade, you had a few hours to lock in that options contract on the November $13 call for $.90 or lower. As of this writing, the stock added another 7.4% Friday morning, and the Bid for the November contract is at $1.36. That’s a more than 50% increase from the recommended entry. APT is still a Buy, but you need to play defense a little. We want to raise the trailing stop on APT from $8.25 to $10.00.

Lakeland Industries (NASDAQ:LAKE)

Our final trade from Thursday morning is Lakeland, which makes protective clothing. I set a trailing stop of $22. It’s safe to increase that now to $25 after the stock started to breakout again. Shares have added 3.2% today, and it looks like this is ready to breakout again as well. Options are extremely expensive on this stock in a relatively illiquid options chain. Let’s continue to hold the stock and look for the protection stock to push toward that $30 level. 

Time to Fly

That’s our recap for this week. Lookout for the watch list on Monday. I’ll also have one or two additional price-trend stocks that I’m watching for Sunday. CODX and APT have caught momentum right now, and we’re looking for them to continue their rise next week. Look out for that update soon.

I’m excited for next week. I’m heading to Germany to deliver you a few new ideas from across the pond. I’m also escaping from the Delta outbreak in Florida. 

Have an incredible weekend, 

Garrett Baldwin

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