PLUNGE INTO SUMMER SALE!!š„
Beaten down stocks to watch š
The Market has been quite a rollercoaster latelyā¦ err more like a giant drop tower ride. There are a lot of factors at play, post-pandemic market correction, ever impending recession, inflation, and the debit ceiling bill (which the House just passed a few minutes ago). But one factor some companies are dealing with is their LGBTQ+ marketing campaigns blowing up in their faces.
In this post weāll look at a few companies who are losing billions (yes with a B) over these ads and why theyāre worth keeping an eye on despite all of this. Letās get into itā¦
BUD LIGHT ($BUD)
The biggest loser so far is a clearly Bud Light. After gifting a special can of Bud Light featuring trans TikToker Dylan Mulvaney. Now to be clear, Bud was not releasing special cans for customers only this one can as a gift to Dylan, but regardless, Bud Lightās loyal customers were not having any of it and a massive boycott against the brand began and even Kid Rock blasted back with outrage:
The stock plummeted and bars began cancelling their orders as patrons simply werenāt ordering it anymore. You can hear more about the story in this WSJ episode:
Bud Light is desperately trying to win people back, even offering their product FOR FREE via a $15 rebate:
So thatās the gist of what happened but letās dig into the chartsā¦
I mean that price has plummeted like a stone and may still be falling. That RSI at 19 is awfully tempting as Anheuser Busch is still a major company and will no doubt bounce back from this in the long term, afterall, itās price is still not as lowe as it was in March of 2020 when the pandemic hit and it recovered from that as seen in this monthly chart:
While it may be tempting to grabs some shares, this post is about stocks to watch becasue itās probably best to wait for a bottom to fully form. Especially with June being pride month and it doesnāt appear that Bud Light has learned anything from their mistakes:
Keep watching this stock closely and wait for a real bottom to form. But be careful seeing as how a bottom appeared to form in the above Daily chart at $58.50 but eventually continued to fall.
TARGET ($TGT)
Youād think other companyās would learn from the mistakes made by Bud Light, but that would be giving them too much credit. Target also climbed board the LGBTQ+ train by offering female style swimsuits that allowed men to ātuckā their junk and soon found their stock swimming at the bottom of the same lake.
Below youāll see a familiar looking Daily chart. RSI at 20 and price falling fast.
Itās important to point out how abnormally high this stock price was even before all of the controversy (see Monthly chart below). A post-pandemic correction was inevitable but how much of this price Target can retain has yet to be seen. Itās nearing a previous bottom on the Monthly chart, but that price is still historically very inflated.
Target since moved their Pride products to the back of the stores but this is causing backlash from the LGBTQ+ community.
The question is will Target try to appease them and dig themselves deeper into a hole or notā¦ again itās best to wait a bottom to form before going all in on this position, especially with June Pride Month just about to begin the chances of them making this attempt is higher than usual.
NORTH FACE ($VFC)
The last stock to āgo woke and go brokeā as the right wing kids are saying these days is North Face with their āSummer of Prideā drag queen campaign. Their stock is down about 20% in the past month
While North Faceās stock didnāt plummet as fast and deep as the previous two, its RSI is still below 30 on the Daily chart (below). Though other factors are at play with this stock.
Things havenāt been great for the company for quite some time. Their Q4 2023 earnings call on May 24th reported both earnings and revenue beat analyst estimates, though both have declined year-over-year which is apparent in the Monthly chart below:
While this stock may have more issues bigger than just social issue blowback, there may be some shorter term Swing Trade gains to be made, especially with it being under 30 RSI, though be sure to factor in other aspects of the chart such as 200 SMA and MACD etcā¦
What Lies Aheadā¦
The House just passed a debt ceiling bill that non of them seemed very excited about, which sometimes means it might actually be fair. This could result in some spiking of prices tomorrow as a hopefully sentiment that they may fix this problem before it boils over. But remember it still needs to pass the Sentate for approval.
As mentioned earlier, tomorrow is the start of Pride Month which means major brands will be making extra efforts to show their support and possible backlash may ensure, so be on the lookout for other āfire saleā opportunities amidst backlash and boycotts. Iām not into shorting stocks but those savvier than I may find opportunities to make money on the downside in the coming days.
Happy humpday, have a great rest of your week!
Trade long and prosper!
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