Bull Bear Investor Newsletter 4-17-2023

Thank you for being subscribed to the Bull Bear Investor Newsletter.  This is where I put together an analysis on the S&P 500 and the NASDAQ.  This week I'll be giving you SPY and QQQ suggestions along with three stocks.  Also this week I'll give a Bitcoin Analysis for sixth straight week. Finally I'll discuss PayPal as the stock I'm dollar cost averaging into based on it fundamentals for the sixth time as well. 

S&P 500 - SPY is still showing bullish sentiment based on the simple moving averages and technical analysis.  The regional banking crisis is still playing out in the background along with rumors that the commercial real estate industry could be next with trouble.   This week is the start of earning season and some single stocks can take the SPY higher depending on beating earning expectations.  I'm still taking my trades with caution because I don't believe this banking crisis is over. We do have market economic reports coming this week with the Home builder confidence report coming out on Monday and Housing starts report coming out on the following day.  Last week we saw inflation coming in lower than expectations along with the PPI coming in lower.  However, Gold  and Silver prices jumped on the news of the PPI report.  Proceed with caution on trades with companies that will be effected by these reports.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA above the 20 SMA about 14 trading days ago.  As stated in the rules 5 SMA crossing the 20 SMA is our first warning sign. Notice how the 5 SMA, 20 SMA, and price are above the 200 SMA. Probabilities say that price will continue in a uptrend.  Now we are going to see if we get a pullback of the 5 period RSI below 50.  What I'll be looking for the first pullback with the 5 period RSI dropping at or below 50 to buy call options.  

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about 21 days ago.  QQQ has more upside and if it opens positive I'll be looking to buy call options as the 5 period RSI has more upside also.

Bull Bear Momentum System (BBMS) Trades

When markets are in bullish or bearish trend we look for stocks following either trend and we adjust our charts with the BBMS parameters.  Same as last week my top three are below:  MS, MRK, and AAPL.

MS - (Bullish) Morgan Stanley just had a bullish cross of the 5 SMA crossing the 20 SMA.  I'll be looking for the first pullback with 5 period RSI dropping below 50 to buy call options.

MRK - (Bullish) Merck has a lot of momentum to the upside.  The 5 SMA has crossed and stayed above the 20 SMA for 10 days now.    I'll be looking for the RSI to pullback and drop below 50 to consider call options.

AAPL - (Bullish) still has momentum to the upside. Last week as predicted the RSI pulled back below 50 and if you entered this trade you were profitable.  RSI and price look to have more upside.  If it opens positive in the morning I'd consider buying call options

If you haven't read the book The Bull Bear Momentum System please take the time to do so and watch the videos for better understanding. The link is at the bottom of the email.

Bitcoin

Bitcoin hit a high above $31k and is still showing price support around $27k.  It looks like adding to my position at the 20 SMA was a good decision.  I do know that it is possible that it could pullback to the 50 SMA around $26k. As I stated previously I'm looking to buy the pullbacks to the 20 SMA and the 50 SMA.  The block halving for Bitcoin in next year in 2024.   This means less supply will be on mined in the markets.  Combined with inflation we could see a Bitcoin price that could 20x off of its bottom price of $15,500.  It seems impossible but we are talking $310k Bitcoin price. 

Fundamental Analysis Stock Pick

This week $PYPL didn't come back into my margin of safety price of $72.44 .  It closed at $76.53 which is above our margin of safety.  The numbers say that this stock is on sale.  Even when you use Ben Graham's calculation the numbers are very similar. It is safe to still buy at the current price because you are still in the ball park of the MOS price.  You are also well below the intrinsic value of $145 roughly.  In about month PayPal will report earnings and price has been going sideway.  I expect a earning run could happen.  Check the chart because our MOS price is becoming a strong support level.  I'm still drafting my article on how I get these numbers for my upcoming blog.  As I stated in the previous weeks you can read the book Rule #1 by Phil Town to get a understanding of these numbers.

Thank you for reading 

Brian - The Bull Bear Investor

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