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Shut Up, Elon!

Someone at Tesla needs to confiscate Elon Musk’s phone.

The firebrand CEO is in hot water with the SEC once again for running his mouth on Twitter…

“The U.S. Securities and Exchange Commission on Monday asked a judge to hold Musk in contempt for violating a settlement that required him to get Tesla’s approval before communicating material information to investors,” Bloomberg reports. “He breached that deal with a Feb. 19 tweet that said Tesla would make about half a million cars in 2019, the agency claims. The CEO posted a few hours later that deliveries would only reach about 400,000.”

This isn’t Elon’s first brush with the SEC. His infamous “funding secured” tweet last year led to accusations of securities fraud. Musk cut a deal and paid the piper. But the man just can’t stay out of trouble. As you can probably imagine, he’s not too happy with these recent developments. So why not taunt the SEC before a judge decides your fate?

Tesla

I won’t fault you for thinking this news should flush Tesla shares below critical support near $280. Fortunately for Musk and all his shareholders, the stock hasn’t budged. Shares finished Tuesday trade down less than a buck.

TSLA

Even though the stock didn’t take a dive yesterday, Tesla’s chart has been an absolute mess over the past 12 months. Shares remain stuck in a wide range as we wait for the next episode of the Tesla soap opera to air.

While Elon digs his own grave, bitcoin is hanging on for dear life.

Earlier this month, it looked like bitcoin was barreling toward a test of $3,000.

But the flagship crypto finally caught a bid and slowly churned higher before suddenly popping above $4,000 late last week. You might remember that Bitcoin staged a quick $1,000 rally off its lows in December, briefly poking its head above $4,000.

Like the late December rally, the bulls quickly lost interest and bitcoin immediately gave back most of its gains. It’s quietly trading near $3,800 early this morning.

Bitcoin

Just a few weeks ago, bitcoin was running the risk of a fast ride toward new 52-week lows. But recent action has been much more bullish. Yes, bitcoin has a lot of work to do to reclaim a bull trend. But a quick series of higher lows hints at better days ahead.

Turning back to internet drama, are we seeing a changing of the guard in the social media space?

Twitter Inc. (NYSE:TWTR) made headlines yesterday when the platform suspended a right-wing activist named Jacob Wohl for “creating fake accounts in an alleged attempt to manipulate the 2020 presidential election,” the Washington Post reports.

The stock sank 3% on the day — but it’s difficult to say whether Wohl’s suspension moved the needle. After all, Twitter has been in disarray after topping out above $45 last summer. The bulls still have a lot more work to do to set this stock up for a viable short-term trading opportunity.

While Twitter struggles, rival Snap Inc. (NYSE:SNAP) is finally getting a second wind. As I highlighted a couple of weeks ago, Snapchat’s daily active user count stabilized during the fourth quarter (Twitter is struggling to retain users at the moment). That metric alone was enough to help juice shares by more than 20% after SNAP reported earnings earlier this month.

In the blink of an eye, SNAP is now up more than 80% year-to-date.

SNAP

Is it time to seriously look at a SNAP trade? Some analysts believe the worst is finally over for the stock.

“Keep in mind that at the time of its IPO, some Wall Street projections plotted $2 billion in annual revenue,” notes MarketWatch’s Jeff Reeves. “Snap is taking some time to get there, but is expected to hit $1.5 billion in revenue this year after 30% year-over-year growth and another 30% in fiscal 2020 to hit that $2 billion target. Furthermore, Snap has been investing aggressively in R&D, with $1.5 billion spent on research in 2017 and another $772 million last year to ensure it keeps that momentum.”

Snap will still need to innovate and continue to hang onto its user base to stay relevant. But I’m keeping a close eye on its chart. If it can consolidate these gains constructively, we could have a hot new trade on our hands…

Sincerely,

Greg Guenthner

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Greg Guenthner, CMT, is the editor of Rude Awakening PRO and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing for 13 years. In 2018, Greg’s Rude Awakening PRO portfolio beat the S&P 500 by 14%.

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