A strong yank on multiple names and sectors, with XBI being one of the worst. November is usually seasonally strong for Biotech & lower rates are usually bullish. So far the sector has rejected both narratives.
OXY plummeted yesterday following a strong earnings report, as did XOM and various others in the Oil & Gas space. All recovered aggressively with OXY going from 3% down to closing nearly 2% up, a 2x ATR move.
A lot of the Oil & Gas sector now looks extremely bullish, it seems the CEO of OXY is very aware of the increased power demands from AI and mentioned it as such in the earnings call.
$XOM and $HES are both very nice setups in the sector, the adds on OXY yesterday were in my opinion a gift.
The recent moves in Space & Uranium are perfect examples of patience and a reminder that people love to chase vertical charts. The more experienced you become the harder it is to believe that people would rather pay a 400% premium just as long as everybody else is in it. SMR is a great example from the thesis posted in July 2023, I can remember sitting in the airport lounging typing up my reasonings, unfortunately, I was far too early and never held a substantial position.
So as you build a thesis on a name/sector just remind yourself that 90% of the time the stock will do very little or go against you.
Given my current exposure and the overall extension in multiple names/sectors, I plan to sit tight before adding more risk to the book. I’m currently spending 6-7 hours a day researching various companies and sectors.
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