💼 Inside the Portfolio: Updates from our Swing Trading Desk
04 Feb 2025 - Insights, adjustments, and forecasts about our latest swing trades 💹
Position Updates:
Guardant Health (GH) position was liquidated at the break-even point on Friday
Redfin Inc (RDFN) holding was fully divested on Monday, following a 30% position reduction on Friday
Strategic exits were executed for Block Inc (XYZ), Rocket Lab USA Inc (RKLB), and Celestica Inc (CLS) also on Monday, resulting in minimal drawdown.
New Positions and Subscriber Insights:
Market volatility and significant gap-down openings are inherent risks in equity trading. When the NASDAQ-100 (QQQ) experienced a decline exceeding 2% and breached key technical support levels, we implemented our risk management protocol by converting to cash positions where insufficient profit cushions existed.
In retrospect, while this defensive positioning may appear premature given subsequent market behavior, it aligns with our long-standing investment doctrine prioritizing capital preservation and systematic risk management over short-term gains.
Current market conditions exhibit exceptional volatility metrics. We maintain a cautious stance and will seek to reconstruct our portfolios with fresh positions when market conditions demonstrate more favorable risk-reward characteristics and technical stability.
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1. Celestica Inc. (CLS)
Celestica Inc. provides hardware platform and supply chain solutions in North America, Europe, and Asia. It operates through two segments, Advanced Technology Solutions, and Connectivity & Cloud Solutions. The company offers a range of product manufacturing and related supply chain services, including design and development, engineering, supply chain management, new product introduction, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, asset management, product licensing, and after-market repair and return services. It also provides enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, servers, and storage-related products; capacitors, microprocessors, resistors, and memory modules; and power inverters, energy storage products, smart meters, and other electronic componentry products. The company serves aerospace and defense, industrial, energy, health, capital equipment, original equipment manufacturers, cloud-based, and other service providers, including hyperscalers, and other companies in a range of industries. Celestica Inc. was incorporated in 1994 and is headquartered in Toronto, Canada.
Celestica Inc. (NYSE:CLS) has demonstrated remarkable momentum in the technology manufacturing space. Its stock performance reflects strong fundamentals and strategic positioning. The company's technical indicators remain robust, supported by consistent revenue growth and margin expansion, which have contributed to its impressive market performance. The combination of operational excellence and strategic market positioning has resulted in significant shareholder value creation, and the stock has shown substantial appreciation.
A key catalyst has been Celestica's growing presence in the AI and data center segments, which delivered exceptional results in the latest quarterly report. The company's revenue outlook for FY2025 has been revised upward to $10.7 billion, representing a $300 million increase from previous guidance. This upward revision, coupled with expanded operating margin projections and enhanced free cash flow expectations, underscores the company's operational strength and market opportunity capture. The transformation from a traditional electronics manufacturing services provider to a strategic partner in high-growth technology segments has resonated strongly with investors, as evidenced by the company's expanding operating margins and consistent revenue growth trajectory.
Industry dynamics continue to favor Celestica's growth prospects, with AI and data center tailwinds expected to persist for several years. The company's aggressive investments in R&D and strategic leadership appointments demonstrate management's commitment to capitalizing on these opportunities while maintaining operational efficiency. This strategic focus has allowed Celestica to deliver consistent margin improvements while positioning itself at the forefront of technological innovation in its core markets.
Entry Point: Initial position acquisition was predicated on exceptional quarterly earnings performance. However, the substantial gap-up in pre-market trading presented challenges for optimal entry point identification. Our strategy involved monitoring the initial price consolidation following the market open to identify potential retracement opportunities.
The $111.00 price level, corresponding to the mid-January consolidation zone, represented a significant technical reference point. This level was identified as a potential support zone and key technical threshold for price action validation.
The entry strategy involved multi-timeframe analysis, utilizing both 5-minute and 15-minute charts to identify high-probability entry points with favorable risk-reward characteristics. Position initiation was executed at $113.00 with a predetermined risk parameter of $4.00 per share, establishing a clearly defined stop-loss threshold.
Support and Resistance Levels: Support is currently established at $111.00 on the daily chart. The first resistance level is at $132.00 on the daily, then no resistance (all-time highs)
Additional Notes: Earnings Play
Entry Day: 30 January
Price: $113.13
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