Investments

Stocks This Week: Buy Tesla And Sell Short Baidu

The end-of-month (EOM) numbers for November show strength from November 28th through December 7th. This is not one of the stronger EOM periods; it ranks in the bottom half of the twelve. The S&P has risen in 67.3% of the time for an average gain of 0.60%, the second lowest percentage gain of all of the 12 monthly periods since 1915.

The Tesla weekly cycle bottoms on December 3rd and tops on January 11th. All six buy signals have been successful in the prior year. The stock is likely to rally to the high $300-$350 area in December.

Chart 1

Stocks This Week: Buy Tesla And Sell Short Baidu

This reliable weekly cycle bottoms now.

Cycles Research Investments LLC

Chart 2

Stocks This Week: Buy Tesla And Sell Short Baidu

The stock is oversold and relative strength is strong.

Cycles Research Investments LLC

The weekly Baidu cycle turns down on the 1st and bottoms on December 30th. All eight sell signals have been profitable in the last year. In addition, December has been a weak month for this stock, down 11 times in 14 years for an average loss of 5.5%. Relative strength has been sub-par as can be seen in graph 4. The combination of the falling static and dynamic cycles is likely to send the shares down to the $105 area.

Chart 3

Stocks This Week: Buy Tesla And Sell Short Baidu

This weekly cycle is about to top.

Cycles Research Investments LLC

Chart 4

Stocks This Week: Buy Tesla And Sell Short Baidu

The shares are likely to decline closer to $105-$110.

Cycles Research Investments LLC

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