💼 Inside the Portfolio: Updates from our Swing Trading Desk
31 Jan 2025 - Insights, adjustments, and forecasts about our latest swing trades 💹
Position Updates:
XYZ and GH are now break-even.
New Positions and Subscriber Insights:
Yesterday, we initiated one new position to further enhance the quality and diversification of our portfolio.
As always, entry points and specific details for these new positions were communicated in real time to our paid subscribers via chat through our premium alert system, ensuring they had the opportunity to execute trades promptly. This approach demonstrates our commitment to providing timely, actionable insights to our valued premium members.
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1. Guardant Health, Inc. (GH)
Guardant Health, Inc., a precision oncology company, provides blood tests, data sets, and analytics in the United States and internationally. The company offers Guardant360, Guardant360 LDT, Guardant360 CDx, and GuardantOMNI liquid biopsy-based tests for advanced-stage cancer; and GuardantINFORM, an in-silico research platform that comprises a clinical-genomic liquid biopsy dataset of advanced cancer patients. It is also developing the LUNAR-2 test for the early detection of colorectal cancer in asymptomatic individuals eligible; and GuardantConnect, an integrated software-based solution for clinical and biopharmaceutical customers seeking to connect patients tested with the Guardant360 assay with actionable alterations with potentially relevant clinical trials.
Guardant Health (GH) has positioned itself as a significant player in the liquid biopsy space, with its digital-first approach to cancer diagnostics driving much of the company’s momentum. Integrating advanced testing methods with a streamlined platform allows GH to offer solutions that promise superior accuracy, faster turnaround times, and enhanced patient comfort compared to more conventional approaches. Despite facing challenges in turning a profit, the company’s focus on growth remains evident as it steadily expands its product offerings while navigating the complexities of market adoption.
The company’s latest development, Guardant Reveal, represents a strategic step forward in GH’s vision for comprehensive cancer detection and monitoring. Its recent coverage decision from Palmetto GBA marks a favorable milestone, granting more patients access to this blood-based test for the surveillance of minimal residual disease (MRD) in colorectal cancer after curative intent treatment. This expanded coverage underscores GH’s potential to capture greater market share as demand grows for less invasive monitoring methods that do not require physical tissue samples. However, the economic impact of this breakthrough still needs ongoing evaluation, especially as GH balances innovation costs with practical considerations around pricing and reimbursement.
Looking ahead, GH’s prospects hinge on its ability to translate robust R&D spending into sustainable growth. Operating costs related to research and development have skyrocketed from $10.9 million in 2016 to $365.1 million in 2023, a clear indication of the company’s commitment to investing in the future. Meanwhile, Guardant’s pipeline, which includes flagship products like Guardant360 and Shield, caters to a growing audience of patients and providers seeking diverse testing options that can detect cancer with greater precision. These advantages could drive broader adoption over time, especially if positive reimbursement trends continue and if GH can navigate the capital requirements associated with expansion.
Despite optimism for longer-term gains, GH remains unprofitable, with ongoing negative cash flow and the likelihood of needing external funding to scale production capacity. This dynamic underscores the risk-reward balance that investors face, as the company’s products have yet to offset its aggressive growth strategy fully. Still, given the remarkable growth in R&D and the uniqueness of GH’s technologies, a hold stance seems prudent for those who believe in the promise of liquid biopsy and the expanding demand for less invasive diagnostics. While near-term headwinds may persist, the results of GH’s substantial investment in innovation could yield meaningful returns once the market for advanced blood-based cancer tests matures.
Entry Point: We identified GH at the critical $37 level on the weekly timeframe but weren't able to enter at that point. Following this, the stock formed a tight consolidation pattern which we closely monitored. Our entry was executed when price action broke above the daily chart's descending trendline, signaling a potential trend reversal.
Support and Resistance Levels: Support is currently established at $45.50 on the daily chart. The first resistance level is at $49.00 on the daily, then $55.00
Additional Notes: None
Entry Day: 27 January
Price: $47.89
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2. Block, Inc. (XYZ)
Block, Inc., together with its subsidiaries, creates tools that enable sellers to accept card payments and provide reporting and analytics, and next-day settlement. It provides hardware products, including a Magstripe reader, which enables swiped transactions of magnetic stripe cards; a Contactless and chip reader that accepts Europay, MasterCard, and Visa (EMV) chip cards and Near Field Communication payments; Square Stand, which enables iPad to be used as a payment terminal or full point of sale solution; Square Register that combines its hardware, point-of-sale software, and payments technology; Square Terminal, a payments device and receipt printer to replace traditional keypad terminals, which accepts tap, dip, and swipe payments.
Block, Inc. (NYSE:XYZ) has maintained a solid foothold in the fintech landscape after its stock surged over 30% in the past six months. The technical picture remains encouraging, with strong moving averages and other indicators suggesting that the current uptrend is likely to continue. While top-line revenue growth may not appear particularly robust at first glance, earnings per share have shown significant year-over-year improvement, and EBITDA has demonstrated notable gains. These fundamentals, paired with a fair valuation based on P/S and EV/EBITDA ratios, point to a company that is positioning itself favorably for further upside.
A major catalyst has been the ongoing strength in Cash App, Block’s digital wallet platform, which posted a 21.3% year-over-year increase in gross profit in the most recent quarter. Overall gross profits expanded by 19% to $2.25 billion, modestly surpassing guidance and reinforcing the company’s momentum long after the height of pandemic-driven digital adoption. Once seen as a “growth at any cost” business, Block has now refocused on cost discipline, evidenced by consistent operating expenses and a hard cap on headcount. This has allowed the company to deliver a 36% adjusted EBITDA margin and a 20% adjusted operating income margin, recalibrating investor perceptions around its potential to generate sustained profitability.
Policy developments could further benefit Block’s growth trajectory, with President Trump’s cryptocurrency-friendly stance potentially catalyzing adoption within fintech. That narrative supports the argument that a renewed Trump administration might offer sector tailwinds, particularly in areas where digital currencies intersect with payment platforms. While the timing and magnitude of this boon remain speculative, they nonetheless contribute to a positive backdrop for a company that has already demonstrated an ability to adapt and refine its focus.
Moving forward, the combination of bullish technicals, balanced valuation metrics, and ongoing innovation in core platforms like Cash App makes the stock attractive for investors anticipating continued growth.
Entry Point: The equity presents exceptional chart characteristics across multiple timeframes, exhibiting robust technical formations on daily, weekly, and monthly intervals. Of particular significance is the recent completion of a cup and handle pattern on the weekly timeframe. Our entry strategy was precisely calibrated to capitalize on the breach of the descending trendline, signaling a potential trend reversal and renewed institutional accumulation.
Support and Resistance Levels: Support is currently established at $87.50 on the weekly chart. The first resistance level is at $94.00 on the daily, then $100.00
Additional Notes: None
Entry Day: 29 January
Price: $89.16
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