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Weekly Catalyst: Chinese ADR Stocks on China Reopening and Marijuana Stocks on SAFE Banking Act Vote

Written by Moneypig Trading


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Hello traders and investors!


Moneypig Trading delivered a great week! This week's highlights are:



1. Fed SOMA balance and market summary


https://www.moneypigtrading.com/fed-soma-balance


2. Some critical events for the next two weeks:


Week of Dec 5


No Federal Reserve speaker schedule


3. Individual Charts to watch


Marijuana SAFE Banking Act vote speculation is boosting all of the marijuana stocks


3.a. Marijuana stocks $TLRY



Downside: 4.2, 3.81

Upside: 4.87, 5.38, 5.97


Comment: breaking up on the marijuana SAFE Banking Act vote speculation. We believe $TLRY has room to $8~$20/share if the marijuana SAFE Banking Act can be passed before Jan 3rd, 2023.


Also, watch other marijuana stocks $CGC $MSOS $HEXO etc. Be sure to check our Youtube videos for this marijuana industry. Please check our latest youtube video for the sector.


Marijuana Stocks Introduction 1: US Marijuana Legalization Could Boost the Cannabis Stocks 5X


https://youtu.be/zskhhx-3lYE


Marijuana Stocks Introduction 2: Canada Marijuana Companies Tilray $TLRY Potential +100%~400% Upside


https://youtu.be/zQSEI30wLU4


Dec 15 is the possible marijuana SAFE Banking Act voting date


https://youtu.be/2k020aQHwus


Possible Action (no action yet):


Long $TLRY

Long $TLRY 01/20/23 4.5c or 5.5c


This weekend, the Chinese government eased the notorious zero COVID-19 policy. This will be a HUGE catalyst for the Chinese ADR sector.


3.b. $WYNN Wynn casino continues from last week


First, Look at our price target in last week's weekly email! $WYNN closes right at 85.15, where we forecasted last Sunday!




This week’s WYNN chart




Downside: 83.12, 80.85, 78.37

Upside: 89.24, 91.18, 93.11, 95.08


Comment: The Chinese government announced that it has tentatively renewed the casino licenses of MGM Resorts (NYSE:MGM), Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), Melco Resorts & Entertainment (MLCO) for 10 years. This news takes off the most significant risk for these casino stocks.


This weekend Chinese government eased the notorious zero COVID-19 policy. This will be a HUGE catalyst for the Chinese ADR sector. The revenues of $WYNN and other Macau-focused casino companies have been down around 55% due to the COVID-19 lockdown. Once China reopens, its revenues will climb up quickly, and so does its stock price.

Possible Action (no action yet):


Long $WYNN for the long-term investment


$WYNN weekly 90c long if 89.24 breaks above and hold


For weekly options, we have to see how much $WYNN gaps up



3.c. $MLCO Melco Resorts & Entertainment


Downside: 8.52, 8.04, 7.63, 7.08

Upside: likely gap up to 9.52~10, room to 10.91, 11.81 this week


Longer term target: $18~$27/share in 2023~2024 if China can continue to reopen from the COVID-19 pandemic


Comment: Another casino stock that has huge upside potential. Please see the $WYNN comments above.


Possible Action (no action yet):


For weekly options, we have to see how much $MLCO gaps up


We share our long-term investment alert on $MLCO stocks on Twitter


https://twitter.com/MoneyPigTrading/status/1598702403619942400?s=20&t=VdeA6hfj1GPXSBPJs3dIfg




3.d. $NIO NIO


Downside: 12.53, 11.61

Upside: 14.84, 15.31, 16.03, 16.89


Comment:


$NIO hits its record high delivery in Nov 2022. The most significant risk for the NIO bull thesis is China's economy slowing down, which is finally off the table after China reopening news this weekend.


The $NIO stock price and other Chinese EV companies are highly undervalued compared to the US EV companies:


China Major EV companies


$BYD Price/Sales (ttm) = 1.89

$LI Price/Sales (ttm) = 3.53

$NIO Price/Sales (ttm) = 3.73


US Major EV companies


$TSLA Price/Sales (ttm) = 8.33

$RIVN Price/Sales (ttm) = 25

$LCID Price/Sales (ttm) = 45.27


If $NIO can keep up the production capacity and expand into Europe, we believe the fair market value for $NIO would be $20/share in 2023, and potentially $30/share in 2024.


There are still a few significant risks here, making $NIO a potentially high-risk and high-return investment:


1. China EV demands drop and/or China's economic downturn in 2023

2. China ADR delisting

3. EV production issues

4. EV market competition risks

5. Geopolitical tension


Possible Action (no action yet):

Long $NIO stocks


For weekly options, we have to see how much $NIO gaps up



About us:


Moneypig Trading is a group of data-driven investors and traders with excellent and consistent investing and trading records, as shown here.


Sign up Moneypig Trading Discord group to excel in your Trading!



Disclaimer:


  • Not financial advisors. Please invest at your own risk.

  • We are currently holding $TLRY $CGC $WYNN $MLCO stocks & long call options

  • If marijuana is not legal where you are located, we do not encourage any use, growth, or sale of marijuana. Please consult your local attorneys for any related questions




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