The United States just set a record of the most COVID-19 cases in a day this past Friday, October 30th: 100,000 new coronavirus cases. Though this is known to the whole world as people watch and see the news reports on the pandemic everyday and some even routinely monitor the numbers. This wave of COVID could completely change the rest of Q4 for this year as elections are also coming up and this is arguably the most important election in US, if not, world history. This will change the economy and the election could change the projections of many stocks as the highly volatile market is already very risky for day traders and options traders.
Some stocks to watch in these upcoming months are Netflix (NFLX), Zoom (ZM), and Moderna (MRNA). Out of these, I think Netflix is the safest bet as Zoom and Moderna could be more unpredictable, but are suitable for weekly/monthly options. With Netflix just reducing their prices they did climb pretty high, but came back down as followed by the popular trading strategy, buy the rumor, sell the news. This basically means that a stock should be bought before the rebound and should be followed based on rumors and sold before the news actually comes out. As seen in many top tier company stocks such as Microsoft, Netflix and Tesla. Stock prices rise with a rumor and drop when the news comes out, so it’s not ideal to buy it right before the news comes out.
With NFLX, this stock has been floating in the mid 400s to mid 500s for a few months as COVID started and an ideal buy would be under $480 and sell would be about $520. Projections for the fourth quarter of Netflix are lower than last lower, over 30% lower however we could see this be downgraded as Coronavirus cases surge across the country, flu season is starting and the weather is getting cooler prompting many people to stay indoors and spend their time inside their homes.