Just a few weeks ago, we highlighted three no-brainer end of year stocks to trade.
In fact, as we said in mid-October, “It’s time to start looking at some of the top New Year Resolution ideas, as we do every year. In the next few weeks, there’s Halloween, when we eat more of the candy we attempt to hand out at the door. Then, there’s Thanksgiving, where we eat until we pass out from too much tryptophan. Then, before you know it, the December holidays are here. “
As expected all three of the mentioned stocks took off.
And today, each is presenting us with another opportunity on the downside.
One of those trade ideas was Planet Fitness (SYM: PLNT).
That’s because, for the last several years, the stock tends to take off around the holidays. We saw it take off in late 2020, in late 2021, in late 2022, and again in 2023. We expect for the same thing to happen again this year.
When we issued that note in October, PLNT traded at around $80 a share. Today, it’s up to $100.34. However, as we near the first of the year, investors may want to short PLNT or buy a put option. That’s because after predictably rallying ahead of the holidays and the new year, it also predictably pulls back after the first of the year, as well.
In fact, we’ve seen PLNT pull back shortly after the new year since 2020.
The second one was Peloton (SYM: PTON), which ran from about $4.80 to a recent high of $10.10.
The company “initiated several new growth levers in both hardware and software that will help the company achieve its profitability metrics for FY25 of $200M to $250M (adjusted EBITDA), as well as obtain positive free cash flow of $75M by next year,” as noted by Seeking Alpha.
PTON could also pull back shortly after the new year, as it did last year – and after a brief rally in 2023, as well.
The third Resolution pick was Lululemon (SYM: LULU).
“Last trading at $280, we’d like to see LULU retest $300 initially. Helping, company CEO Calvin McDonald just increased his stake in LULU by another 4,000 shares, paying $1.04 million,” we said in October. Today, LULU is up to $388.80 thanks to earnings and buybacks.
Much like PLNT and PTON, LULU also has a history of pulling back around the first of the year as well. Investors may want to consider shorting LULU or buying a put option if PTON falls again.
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