TOP 5 STOCKS TO WATCH THIS WEEK
In a Nutshell
Markets are gapping up despite geopolitical tensions, with Fed speakers and economic data (ADP, PMI, housing) setting the tone for volatility. Circle shows 33% downside from overvaluation while CRDO and MU offer better risk-reward setups; MSTR and NBIS remain dangerous shorts given Bitcoin strength and consolidation patterns. QQQ at overbought resistance warns against leveraged positions, and the video promotes a $1,000 weekly giveaway via Weeble to encourage structured trading habits.
These notes were generated by AI and may contain inaccuracies.
Markets began to gap up during overnight hours with a potential deal possibly being announced in the coming future. Oil prices showed unusual movement with UCO down 2.1% and oil down 2.28%. This movement appears contradictory to typical market reactions during geopolitical escalations, suggesting insiders may be positioning ahead of major headlines.
Key economic reports scheduled include:
- Weekly ADP employment change on Tuesday
- PMI data on Wednesday for manufacturing and services sectors
- New home sales data on Thursday, particularly relevant due to the significant slowdown in the housing market
- Durable goods orders on Friday
- Eight Fed speaker events throughout the week
Current Fed rate hike probability stands at 59.7% for the next meeting.
Despite news of attacks and potential US military involvement against the Houthis in Yemen, markets are showing green across the board with INTC up 3.9% and memory chip stocks up over 1%. The NASDAQ is currently up 0.40% during overnight hours, which contradicts typical negative reactions to geopolitical escalations.
Circle shows a descending resistance pattern with lower highs and lower lows on the 4-hour timeframe. The stock previously pumped from $57 to $100, creating momentum interest. However, the consistent descending pattern suggests caution. Using Investing Pro software, the stock shows 10% downside potential with a 51 P/E ratio, making it expensive relative to peers. Market cap sits at $23 billion with net income of $451 million, presenting unfavorable risk-to-reward with 33% potential downside based on recent lows.
CRDO displays an oversold reversal pattern with previous instances of pulling back to oversold levels before ripping up to new highs. Technical analysis shows 14% upside potential with strong performance metrics in relative value, cash flow health, and price momentum. Despite an expensive P/E ratio, other fundamentals appear favorable. The stock is testing previous resistance that could become new support. Risk management should focus on position sizing if descending highs begin to form.
NBIS presents extreme valuation metrics with a 1,400 P/E ratio, $42 million net income, and $60 billion valuation. While fundamentally overvalued, shorting is not recommended because the stock is consolidating rather than actively selling off. Shorting requires paying interest on borrowed shares, making it costly to maintain positions on stocks that aren't dropping. The stock has formed a bull flag pattern and held support around $200. Shorting would require breaking below previous support levels, which would be challenging given the strong bullish trend. Markets can remain irrational longer than investors can stay solvent.
Micron has been consolidating around $1,000 with historical rejection patterns at this level followed by drops to $900 support. The stock shows a 22.7 P/E ratio, making it relatively cheap compared to other tech names, with strong forward sales for the next 5 years. Shorting opportunities exist around the $1,000 resistance, but require experience due to the stock's tendency to run higher. For long positions, breaking above $1,050 could signal momentum continuation. The stock has run from $400 to $1,200, representing 200% gains, raising questions about sustainability.
LRCX ran up to highs of $438 before pulling back nearly 50% and is now consolidating. The pattern shows lower highs and lower lows from peak levels. Breaking support could lead to significant gap down risk.
MSTR had a significant run-up last week with Bitcoin holding above $80,000. The company buys Bitcoin through diluting investors via share offerings. Despite being fundamentally overvalued, shorting is not recommended while Bitcoin remains bullish above $80,000. The stock has historically pumped and dumped from highs of $500, but Bitcoin's strength creates favorable conditions for continued MSTR bullishness. Shorting should wait for Bitcoin to drop below key levels. No investor has been shown holding MSTR long-term in profit due to repeated buying at elevated levels during rallies, followed by dilution through share offerings.
"Markets can stay irrational longer than we can stay solvent."
"I've never met one investor that is in the green [with MSTR]. The reason why is as MSTR rallied, they bought more at elevated levels. They got greedy."
"The quicker that you can cut losses wherever that stop loss should be or that max dollar loss, max percent loss, the better off that you will be long term."
The last thing disclosed is that QQQ is testing a resistance range and reaching an overbought condition. This is not a guaranteed rejection, but historically QQQ, the NASDAQ ETF, does not hold up well at these overbought levels, which typically leads to a pullback. This serves as a reminder to remain invested for the long-term but avoid being leveraged at overbought levels to prevent getting caught off guard if markets begin to pull back.
This week marks the beginning of a $1,000 giveaway being conducted in partnership with Weeble, the trading application shown in the video. The giveaway is exclusively for Weeble users. New users who make a $100 deposit can earn up to 12 fractional shares as a sign-up bonus. The affiliate link is the fourth link in the video description, and using this link is required to participate in the giveaway.
The giveaway is a weekly program, not a one-time or monthly event. Details will be posted the following day, and participants are encouraged to stay active in the associated chat. Each week will feature new challenges designed to incentivize beginners to develop healthy trading habits.
The upcoming week's challenge is described as a "build week," with the $1,000 prize potentially going to the participant with the largest percent gain for the week, not dollar gain. Future challenges may focus on risk management or quality setups to encourage beginners to implement healthy trading habits. The goal is to incentivize participants who are already taking trades to become more structured and intentional traders.
Participation is optional. Those who do not like Weeble or choose not to join are not required to participate. All relevant links, including the live trading session link (second in the description) and the Weeble affiliate link (fourth in the description), are provided in the video description.
Oracle stock will be discussed in tomorrow's live trading session. There is uncertainty surrounding Oracle currently, partly due to Michael Burry. The speaker offers to either address this in the live trading session with the LPP team or create a dedicated video on the topic.
The discount link remains active until the end of the month. The speaker expresses appreciation for viewers' time and encourages ending the year on a positive note.
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