While Investors Await New Iran Drama, I'm Looking at These Intriguing Stocks
Appetite for risk is back, as meme action in Avis Budget looks a lot like GameStop in 2021.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Investors are in wait-and-see mode in front of the Iran-U.S. negotiations that are supposed to begin on Wednesday. With President Trump's ceasefire deadline set for Wednesday night there are increased odds of dramatic events and higher levels of volatility.
In addition we have the Senate hearing for the new Fed Chair nominee Kevin Warsh that is putting focus on monetary policy. We also have a slew of earnings reports in the next few weeks that are going to be particularly important in the AI sector.
Stuck Between Extended and Pullback
Technically, the indexes are too extended to chase but haven't pulled back or consolidated enough to make for good entry points. Many individual stocks have similar patterns but there are some good pockets of momentum.
The Appetite for Risk Is Back
One stock that is interesting to watch is Avis Budget (CAR) . The stock was up more than $100 at one point Tuesday on top of a move that has taken it up about seven-fold in the last month. The action is similar to GameStop (GME) when it was the meme stock darling back in 2021.
Aggressive high-risk traders are using a greater-fool or Ponzi-like approach to the stock, which is being driven in large part by a short squeeze. It is pure gambling but it illustrates that there is an appetite for high risk right now. There are always a few crazy names in any market but there are more than usual currently.
Adding to Amprius
I'm trying to narrow down some top candidates to load up on as market conditions develop. My best name today is Amprius Technologies (AMPX) , which I have discussed before.
The company is a major player in the drone space and produces the highest energy-density lithium-ion batteries on the market. The drone sector is looking better today.
A New Position in NESR
A new name I started today is National Energy Services Reunited (NESR). NESR should be a primary beneficiary when regional stability returns to the Middle East. It is one of the largest national oilfield services providers in the region.
NESR's business model is based on the ability of sovereign nations to maintain and expand their energy infrastructure. When the conflict comes to an end, the immediate priority for these governments will be the restoration of production levels to fund reconstruction. This will create a surge in demand for the drilling and completion services that NESR provides.
NESR has a strategic advantage because it operates as a "local" champion with deep-seated relationships in major markets such as Saudi Arabia, Oman, and Kuwait. As security risks diminish, the cost of operations drops and the backlog of deferred maintenance projects typically starts to move. This could result in a transition to a steady growth phase with significant margin expansion.
I established an initial position in NESR and will do more work on the stock as the chart develops.
Bring on the Pullback
I'm working on my stock picking today and will be happy to see the market pull back.
At the time of publication, Rev Shark was long AMPX and NESR.
