NFLX vs PTON: Best Stay-at-Home Trade?

The ice and snow rolled in…

Then the house went dark!

I soon discovered the cause of all my troubles when I ventured out for supplies:

utility crew

The utility crew hard at work. They must know I have trades to make!

Thankfully, my power was restored after just eight hours following Monday’s storm that covered my Michigan lake house in a wintry mix. But those eight hours felt like days. Not only is it cold up here, but cell phone service doesn’t work this far outside of town.

There was no way to predict the storm would take out that power line. I don’t know the exact conditions that can cause this type of destruction — and I doubt those utility workers do, either. But they’re ready to work as soon as they can assess the damage. They know how to use their tools. They can react to the conditions without thinking about why it’s happening…

It’s no different in the markets. We know better than to think about why markets move. When you think too much as a trader, it often leads to trouble and losses. The market is not logical and you ABSOLUTELY need to trade what you see with good risk-reward setups.

That’s why we’ve had so much success lately despite all the talk about the markets and economy falling apart, posting 21 consecutive winners of 50% to 100% since March expiration, including TEN winners last week alone. [Learn more about my strategy by clicking here!]

Meanwhile, the battle for 2,800 on the S&P continues.

The averages continue to churn as earnings season kicks into gear, with the S&P flirting with another test of the important 2,800 level. As I predicted earlier this week, the market will probably need to test 2,800 a few times before it extends higher.

The bulls and bears are now duking it out! This fight isn’t over yet…

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Chart of the Day: Stay-at-Home Stocks Soar!

Greg GuenthnerThe averages are flat on the week as earnings reports begin to roll in. But there’s one group of stocks that’s on fire right now…

I’m talking about stay-at-home plays — the companies that are benefiting the most from the COVID-19 shutdown. While restaurant and retail names continue to suffer, the stay-at-home firms that provide streaming entertainment, remote meeting software, home delivery, and other quarantine necessities have captured traders’ full attention.

We already highlighted no-brainer coronavirus winner (NASDAQ:AMZN) and its surge to new highs earlier this week. But the online retail king isn’t the best performing stay-at-home name we’ve encountered this week…

Today’s trade battle features a household name streaming service and an upstart home exercise IPO: Netflix Inc. (NASDAQ:NFLX) vs. Peloton Interactive Inc. (NASDAQ:PTON).

Netflix is arguably another no-brainer play as the entire country is glued to the couch re-watching Tiger King. The stock broke out to new all-time highs on Monday and hasn’t looked back since, gaining another 15% after cracking its February high-water mark.

Meanwhile, Peloton just managed to clear new all-time highs yesterday following a multi-session short squeeze. The stock has steamrolled its naysayers and has now posted a clean double off its March lows.

NFLX chart

Thanks to such a powerful recovery, PTON wins this today’s battle for top stay-at-home play. While NFLX still holds the year-to-date edge with gains approaching 40%, the stock appears more extended on the daily chart. And even though PTON can be more volatile than NFLX, it’s possible this epic short squeeze continues into next week.

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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