Today we are watching…
1. Virgin Galactic (#vg)
Do a little jig on the spot if you managed to capture the upside from this market-beater! Virgin Galactic is still rising, now up to $41 in out-of-hours trading as overboard bulls see no reason to end the frenzy. Bearish options writers are also buying the stock. They need to balance their downside exposure, but this only compounds the momentum even more. A third of all investors are short Virgin Galactic, so if they buckle as it keeps rising, their sell orders will only push the stock higher again. This one could keep running, folks, or, it could crash and burn spectacularly. Enjoy the show!
2. Adidas (#adidas)
Chinese sales of Adidas sports apparel have declined 85% since January 25th compared with the same period a year ago, and nobody’s in any doubt that the coronavirus is to blame. In terms of the Shanghai Composite Index, the outbreak has caused a breakout. President Xi is ordering aggressive fiscal stimulus to keep bulls believing, and he’s going to have to keep doing that until the virus is tamed. Adidas’s share performance is evidence that stimulus isn’t forthcoming everywhere. Investors are selecting overseas luxury goods brands like LVMH and Gucci owner Kering as short-selling candidates, as they’re being less supported by central banks during these testing times!