💼 Inside the Portfolio: Updates from our Swing Trading Desk

09 Dec 2024 - Insights, adjustments, and forecasts about our latest swing trades 💹

Position Updates:

Tesla Inc. (TSLA): The position was strategically reduced following a remarkable 10%+ gain over three trading sessions. Secured profits amid extended market conditions while maintaining a core position with adjusted risk parameters. Reduction primarily driven by portfolio volatility management objectives.

Pure Storage Inc. (PSTG): Full position exit executed at breakeven. Technical indicators remain constructive with strong support at $63 and decreasing volume on pullbacks. Will continue monitoring for potential re-entry opportunities when market conditions stabilize.

New Positions and Subscriber Insights:

Two new positions were initiated today, with one focused on thematic opportunities and another representing a long-term value investment thesis. Comprehensive trade details, including entry points, position sizing, and risk parameters, have been disseminated to our premium subscribers through our real-time alert platform, ensuring optimal execution timing.

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1. Archer Aviation Inc (ACHR)

Archer Aviation Inc., an urban air mobility company, engages in designs, develops, manufactures, and operates electric vertical takeoff and landing aircrafts to carry passengers. The company was formerly known as Atlas Crest Investment Corp. and changed its name to Archer Aviation Inc. Archer Aviation Inc. was incorporated in 2018 and is headquartered in Palo Alto, California.

Fundamental Analysis

While Archer maintains a robust cash position of $501 million, supplemented by potential Stellantis funding, the company remains pre-revenue with significant cash burn. The 15-28 month runway provides breathing room for FAA certification pursuit, though profitability remains distant.

• Key Catalysts:

  • Georgia manufacturing facility completion

  • Pending regulatory approvals (domestic/international)

  • Strategic partnership with Stellantis

  • FAA-type certification progress

  Market Dynamics: The eVTOL sector is experiencing heightened investor interest, creating trading opportunities despite fundamentals. While Archer remains a "story stock" without current profits, the sector's momentum offers potential for short-term gains.

  Challenges:

  • Infrastructure limitations in urban environments

  • High cash burn rate

  • Regulatory uncertainty

  • Scalability concerns in dense cities

Trading Perspective: While long-term fundamentals warrant caution, the current market enthusiasm for eVTOL stocks presents tactical trading opportunities. The sector's momentum could drive price appreciation ahead of key catalysts.

Technical Analysis

• Entry Point: We initiated our position when the stock broke above the 7.30 level on the daily chart. The stock dipped two days under the 10ema and then reclaimed it, Hot theme.

• Support and Resistance Levels: Support is currently established at $6.80 on the daily chart. The first resistance level is at $10.00 on the daily, then we have room until $18.00 (all-time high)

• Additional Notes: None.

Entry Day: 05 December

Price: $7.32

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2. Ecopetrol SA ADR (EC)

Ecopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services.

Fundamental Analysis

Ecopetrol's financial position shows mixed signals with net income at COP 3.6 trillion, down COP 1.4 trillion YoY. However, excluding external factors, adjusted earnings would have shown a 19% increase to COP 6.1 trillion, demonstrating operational efficiency despite sector headwinds. The current depressed oil and gas sector environment presents a good entry opportunity, as any oil price surge could significantly boost stock performance.

Key Catalysts:

• Major gas discovery offshore Colombia (55% stake with Petrobras)

• Strategic pivot from renewables to core oil & gas operations

• Potential Colombian policy reforms

• Record production levels despite market conditions

• Oil price recovery potential

Market Dynamics: The energy sector is undervalued, with EC trading at attractive multiples. While the broader oil & gas sector faces pressure from energy transition concerns, EC's operational excellence and strategic repositioning make it well-positioned for a potential sector rebound. The company's focus on profitable fossil fuel operations rather than costly renewable transitions sets it apart from its peers.

Challenges:

• Declining reserve life

• Substantial debt burden

• Heavy dependence on oil price movements

• Colombian political uncertainty

• Global energy transition pressures

⚡ AI-optimized, human-verified: Our expert team carefully selected Premium market intelligence from Finchat's data. Explore now →

Technical Analysis

• Entry Point: We initiated our position when the stock broke above the 8.05 level on the daily chart. The stock is supported actually by the 10 and 20EMA, forming a little handle on the daily.

• Support and Resistance Levels: Support is currently established at $7.80 on the daily chart. The first resistance level is at $8.50 on the daily, then we have room until $9-9.50

• Additional Notes: Long-term idea, actually the sector is not good and it is depressed.

Entry Day: 05 December

Price: $8.07

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