Talking Technicals [part 1] -- December 3rd
I hope everyone had a great week!!!
I’m going to spend two hours this morning going through charts and another two hours this afternoon. I decided to split up this newsletter into 2 parts so it’s not overwhelming on me or you. Part 1 will be 12 stocks that I currently own; part 2 will be 12 stocks on my watchlist.
The stocks discussed in this writeup (all of which I own) are:
CELH
TMDX
TSLA
CROX
PRCT
META
XPOF
XPEL
TH
GLBE
STEM
SWAV
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CELH — Celsius (I have a position)
We’ll start with CELH again, not only because it’s my biggest position (by a wide margin) but because CELH had another phenomenal week and closed yesterday at a new ATH (all time high). If we connect the high from last year and the summer high we end up with possible resistance at $119-121 depending on which line you look at and where that line is anchored on the highs from last year. It appears CELH did get rejected at the first line yesterday but we could certainly power through next week. I was adding to CELH a few weeks ago on that pullback under $88 (still no clue why that happened) and even though the stock is up 35% since then I have not trimmed my position. I think there’s a decent chance that Pepsi either increases their stake in CELH or acquires them so I don’t want to miss that upside if it happens. I’ll keep the shares I have and continue adding on any pullbacks. TBH I’m not sure CELH ever sees the $80s again and might not even see the $90s unless we get a bad CPI report in 2 weeks and everything sells off. If you watched my interview this week with the CEO of CELH you’ll know that Pepsi (which currently has an 8.5% stake) can increase that stake to 15% in the open market, after that they’d have to come to CELH directly and negotiate for a bigger equity stake or the whole company.
I will admit that CELH valuation is a little rich at $118 however the company is growing triple digits and should do $1+ billion in revenues in 2023 which means the stock is trading at 9x 2023 EV/Sales compared to Monster (MNST) at 7.5x 2023 EV/Sales except CELH is growing 6x faster than MNST. MNST has better operating/profit margins but CELH margins will continue to improve over the next couple years which means EPS growth should be strong which is why the stock will continue to trade at a premium multiple plus the potential for Pepsi to buy them for $140+ per share in the next 6-12 months.
CELH also launched a new flavor this week, Lemon Lime, I have not tried it yet but hear it’s very good. I think Walmart is the only place carrying it right now but unfortunately it’s not on their website yet, just in stores.
If you do want to try Celsius, they have 20+ flavors and you can always order directly from their Amazon store [click here] — my three favorites are still orange, tropical vibe and mango passionfruit.
TMDX — TransMedics (I have a position)
TMDX also had a great week, finally breaking out of a consolidation the past few weeks after riding/bouncing along the 8/10d EMA. TMDX is up 230% YTD and valuation is getting rich at these prices so I did trim my position yesterday. If you’re a trader this is still a name you can own on that breakout with tight stops in place. If you’re an investor I think you wait for the next pullback, perhaps to the 21d EMA (if/when that happens).
TMDX is showing tremendous growth and great execution not to mention their only real competition in the ice cooler so lots of reasons why the fundamentals will stay strong and the stock will go higher. Based on my investment models I have a $152 price target in 2027 which is 136% higher from here so I think TMDX can still be a good long term investment but I’m just not sure what it’s got left for upside in the short term. With that said this stock could easily run to $80+ before the next pullback but alot of that will depend on overall market, CPI number, yields, etc.
TSLA — Tesla (I have a position)
As I talked about a couple weeks ago, I thought TSLA would either bounce off the VWAP from pre-pandemic lows or the 200w SMA — so far it looks like the VWAP was the bottom and a great buying opportunity with the stock already up 17% since that bounce. It’s certainly possible we retest that VWAP if CPI comes in too hot on Dec 13th but with the 200w SMA just below I’d keep my position and just add there assuming we bounced. If TSLA couldn’t hold the 200w SMA then I’d probably sell and wait for a better entry because if we lose the 200w SMA then I have no idea where support might come in.
Looking at the daily chart definitely broke through one DTL (downtrend line) on Wednesday and now running into the next one. With the stock barely above the 21d EMA I’d wait for a breakout through the new trendline and then use that same DTL or the 21d EMA for my stop loss — if CPI comes in cool then I think TSLA blows through those 50d MAs in the $213-215 range. Unfortunately there’s more going on with TSLA right now than just the fundamentals and technicals, you have the whole Twitter mess that puts Elon in the crosshairs. It’s very possible his current actions/comments are alienating potential TSLA customers. I still like TSLA over the long term and I think the current valuation is very reasonable but there’s more noise around this stock than any other I follow. We also saw the first delivery of the TSLA semi truck this week — it got delivered to Pepsi which is extra cool for me because it’s very possible CELH will be delivered in those trucks in the near future.