💼 Inside the Portfolio: Updates from our Swing Trading Desk

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

Position Updates:

Deere & Company (DE): Position terminated following risk management protocols with defined loss parameters. A tight entry attempt with scaled-down allocation proved unsuccessful, implementing a tight $3.00 stop-loss discipline.

JD.com Inc. (JD): Strategic exit executed near cyclical bottom (approximately $0.20 from support level). While timing proved suboptimal, adherence to predetermined stop-loss levels remains paramount for portfolio risk containment.

Archer Aviation (ACHR): The position was liquidated at the break-even threshold during the previous session, maintaining capital preservation objectives.

New Positions and Subscriber Insights:

Our strategic response includes a calculated pivot toward defensive sector allocations, specifically targeting positions in Ecopetrol (EC) and Celsius Holdings (CELH). Given these market dynamics, we're actively implementing protocols to reduce overall risk.

Regarding our recent technical challenges, we've successfully resolved the system disruptions that temporarily affected our portfolio analytics and visualization capabilities. Our engineering team has completed the necessary backend improvements, and all performance tracking systems are now operating at full capacity. Sorry for the inconvenience!

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1. 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

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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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3. Celsius Holdings Inc (CELH)

Celsius Holdings, Inc. develops, processes, markets, distributes, and sells functional drinks and liquid supplements in North America, Europe, Asia, and internationally. It offers various carbonated and non-carbonated functional energy drinks under the CELSIUS Originals name; dietary supplements in carbonated flavors under the CELSIUS HEAT name; and branched-chain amino acids functional energy drink that fuels muscle recovery under the CELSIUS BCCA+ENERGY name.

Fundamental Analysis

Celsius Holdings' financial position shows temporary headwinds due to PepsiCo's inventory management, impacting near-term sales. However, excluding these transitional factors, the underlying business fundamentals remain strong with continued category outperformance and expanding market presence. The current situation presents a potential entry opportunity, as resolution of inventory issues and category growth recovery could drive significant stock appreciation.

Key Catalysts:

• Strategic Acquisition of Big Beverages Contract Manufacturing

• PepsiCo distribution partnership optimization nearing completion

• Strong growth in non-PepsiCo channels

• Investment in marketing and AI capabilities

• Potential increased stake from PepsiCo

Market Dynamics: The energy drink sector maintains robust growth potential, with CELH positioned as a leading better-for-you alternative. While the broader category experiences a temporary slowdown, CELH's operational improvements and strategic partnerships make it well-positioned for recovery. The company's focus on production capacity expansion and distribution optimization differentiates it from competitors.

Challenges:

• Short-term sales pressure from PepsiCo inventory management

• Q4 potential negative impact of ~$15M

• Dependence on overall category growth recovery

• Competitive pressure in the energy drink space

• Need for continued marketing investment to maintain brand momentum

⚡ 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 down trendline on the daily chart. It was an important level touched several times in the last three months.

• Support and Resistance Levels: Support is currently established at $27.80 on the daily chart. The first resistance level is at 31.50 on the daily, then 35.00

• Additional Notes: It’s both a Swing but also a Long Term Play if you have patience, the stock in our opinion is undervalued.

Entry Day: 09 December

Price: $29.13