PenelopeHood
2023-06-09

Long-term investors learn to buy low, sell high. The cheaper the stock the more we like it. Traders on the other hand tend to like stocks with strong price momentum - the more the stock goes up, the more they like it. The reason: As stocks go up, bulls with PTs below the price are forced to come up with justification to increase their PTs. We’re starting to see this play out with both NFLX and TSLA. We’re also now entering the Instit Investor voting season where analysts try to remind buy side investors who was the biggest cheerleader for stocks that have worked when they cast their votes.

Here’s the avg PT vs price charts for $Netflix(NFLX)$ and $Tesla Motors(TSLA)$ Both stocks now selling well above the avg WS PT, which means analysts with buy ratings have to increase their PTs and play leapfrog with each other to maintain their credibility and voice. This is the season - as we enter quarter end and analysts post quarter end previews in front of earnings where we’ll get more PT increases. Throw in I-I voting season and one can expect more price momentum.

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