After an Upgrade, This Could Happen…


Fresh off earnings calls from Apple, Amazon and Gilead, markets are showing signs of volatility into Friday’s trading session.

But that won’t stop me from isolating high probability trades that can be fast, fun and profitable…

Recently, Mattel was upgraded by Wells Fargo and witnessed a 12% price per share increase as a result. However, I’m not a buyer of this recent upgrade and here’s why…

Mattel is best known for being an exclusive toy supplier to Toys “R” Us. There’s one major roadblock with that business model: Toys “R” Us has been slowly going out of business and closing locations for the past decade or so as companies like Amazon continue to dominate the retail consumer space.

Now you may not know this, but oftentimes firms will intentionally upgrade stocks in order to be able to sell out of their shares at higher prices. This is why stocks typically fall in price per share very shortly after their upgrades, in the short-term at least.

You’ll notice on the chart below that Mattel did exactly that immediately after its initial upgrade from Wells Fargo on April 28, 2020. Traders and investors didn’t buy into it – they sold out of it…

Mattel has firm overhead resistance at $8.71/share this morning. I’ll be watching $8.71/share resistance as a level to make a short biased trade on Mattel itself, should a tradable setup take shape.

In the low probability chance that markets and Mattel both rally to the upside, above $8.71/share, Mattel could present a bullish trading setup, strictly from a technical analysis point of view.

And as usual, I’ll plan on collecting all available profits by the end of the day.

Let’s end the week in the green!

Yours for TrackStar trading,

Davis Martin
America’s #1 Premarket and Day Trader

Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.