Domo Arigato Robot stocks! Stock market weekly recap

18 robotic name to workshop into your watch lists

In this week’s recap we’re not going to talk much about the short week as we didn’t get that massive Nvidia beat needed to send the market higher or weak margin guidance to send it lower. Outside of getting our face smashed because of the Okta guide we had a muted week due to weak end of the month flows, just as talked about last week. So not much ‘unexpectedness’ happened.

I will note that the macro data that hit the tape on Friday morning didn’t scream bearish, but it definitely leaned that way. Consumer spending was lower than expected in April, which was obviously coming given how crazy the headlines got in the stock market. PCE was also lower than expected, but that was almost entirely due to the fact that financial expenses were lower than expected….which is because the stock market was down.

Now that it’s back up, that ticks higher, and PCE meets expectations. Which is still not low enough to put towards a cut until really September at the earliest. I still continue to believe that we won’t see any cuts this year. That higher rates will stay until something breaks, and in fact the Fed needs to consider raising. But this is a topic for another stack post.

What I do want to talk about is the end of the month selling from pensions. The real world still isn’t doing fantastic. Though its only loosely because of tariffs. It hasn’t been doing great since Q4 last year. Which is why the fed was trying to front run the weakness by cutting, which became political, and not working the way they thought. I bring up the real world, because given how every day more and more people retire instead of entering the workforce (not even adjusting for the massive youth UE numbers we’ve started seeing), there is going to be a general pressure on equities as long as the market is unstable.

Unstable can be used to describe a number of markets, but in this case I mean ‘stocks like Nvidia, Apple, and Megacaps not just going up and to the right’. Stocks that people follow, and no Tesla/btc doesn’t count, those aren’t what the average person thinks of when they think of stable stores of value in the stock market. This causes people to start thinking about selling some of their stocks, maybe not a huge amount, but 5/10/15% as ‘hey we’re back to flat on the year, the economy doesn’t feel great and I’m worried about my job and if the market is going to flash crash down to the April levels again, I’m going to take some off the table’.

Weirdly enough, because the megas are such a large weight in the market, this causes a continued stream of this, as 30% of all index selling is mega cap sells, the mega caps not going up causes more people to sell, round and round we go. This will eventually stop by either, the economy getting better and people feeling comfortable being max long again, one of the megacaps having such an unexpectedly great earnings report that the stock explodes higher, or enough time goes by/selling happens that they get cheap enough for people to buy them again.

With Nvidia unable to bust through this week, it doesn’t look likely nearer term for the megacaps. That doesn’t mean the index can’t go up, only that we’re continuing on close to starting year two where the megacaps as a group haven’t led for sustained periods of time, and its a trend that doesn’t look like will restart near term.

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We’ll talk about Nvidia’s earnings in a hot second down in the Robotics section, but lets look a few charts of companies I think will do well in the next few weeks that’ve we’ve discussed in the discord but I haven’t written up for a hot second (note I’m long all of these names in various sizes).

The first two are drug names. Novo Nordisk and Eli Lilly. Both of these got hit hard because of RFK, GLP-1 compounder issues, and then some friendly fire due to the UNH blow up.

Both look like they’ve bottomed, with Novo breaking out of the trading range its been in since mid March this week, with easy upside to the mid 70s, and Eli Lilly bouncing off the bottom of the range its been in for the last 18 months and likely has a date with 895~ soon.

NVO daily:

Weekly:

LLY daily- really want to see it overtake that 21 day next week at 747 as of close:

LLY weekly:

Next we have a name that I was very long into the new year and sold it just above these levels in March, Reddit.

They have an investor day coming up on the 9th, and the sell side has turn incrementally bullish on the name now that the froth is out of it and the buy side has left it for dead. Helping the bull case out is its been a publicly traded company for more than year now. That’s important because now it can get added to indexes. This week saw an announcement that it was being added to the R3k. Not a huge amount of index funds attached to the R3k, but some are. Given Reddit’s float is still incredibly tight and there’s probably like <5% of the trading float that would be considered hot money, any incremental buying pressure has to at least make bears somewhat nervous.

Near term the story on Reddit has gotten messier as user growth is still growing at high teens levels but not mid 20% that everyone projected last year. This is mostly due to Google changes. The thing is new users are shown to be incredibly sticky, so even if growth slows, if Reddit is able to continue getting APRU up (which they are) as long as user growth continues higher its bullish Reddit. Maybe not 400+ by EoY bullish, but I think that any data they put out on investor day that indicates growth isn’t in free fall and going to turn negative by EoY this probably races up to 140 very quickly.

There are a lot of people bearish this name right now. For various reasons. Most of them at the root come down to ‘the chart is ugly and it needs to go back to <80’ (or if you’re hedge eye 65~ at least). 20% of the float is short, and given the shorts think there’s huge downside here, they’re not going to cover on moves like the last two days where it just jumps higher and doesn’t go down. They need to be squeezed. Again pointing to material upside with any positive news.

I’ve long commons and 1/26 calls at the 160 strike, I think this starts to move before investor day (aka next week) and depending on what they say that day either sparks the short squeeze or is the blow off top. We’ll see, but I’d be cautious here short.

Last name that isn’t really covered elsewhere is AppLovin. Which went from very very very well followed fintwit/WSB stock to just….not. Mostly because it was one of the first stocks to blow up back in February. Pretty nice holding of its breakout the last few days. If you’re bullish the market this name probably helps lead us higher. Maybe it finally gets into the index this week.

Okay I lied one more, China deal is in a bad spot? MP is going to explode. Like it did the last two days.

Now onto robots.

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