Watchlist: 11/19 The Mother of All Dips

Market Notes:

Hedge fund manager and perma-bear Michael Burry (made famous by shorting the housing market in 2008 and glorified in the movie “The Big Short”) has canceled his renewed calls for “the mother of all crashes.”

To protect himself and his clients against this “crash” he shorted TSLA and ARKK. He lost money on both. Recent filings show he exited both those positions for significant losses.

Now that he bought the top the market is starting to dip. The Russell 2000 slipped lower yesterday while the SPY and QQQ rose.

The put-to-call ratio is still flashing an overbought signal and this morning the markets are choppy. Futures took a dip while I wrote this and I can’t find a catalyst.

The market could use a healthy dip. I’ve got cash on the side waiting to expand my positions. See below for one I’m super excited about.

I’m still risk on, perfect setups only though. Markets could take a bit of a dive before resuming the bullish action. I’m going to be extra cautious today and see how things shake out.

Watchlist:

*Low Float

*TRT has support at $8
*LGVN has support at $9
*LTRY is on watch – See my notes below…
*SEV is on watch
*YQ is on watch
RETO has support at $3
KZR has resistance at $14
EGLX has support at $4.25

OTC stocks, no levels:
DPLS, OSCI

The Case for Lottery.com Inc. (LTRY)

Early investments in disruptive companies can bring riches to shareholders. But those opportunities don’t come around often…

For my long-term investments, I’m focusing on the digitalization of our world. Anything currently based on paper transactions is going to modernize. It’s a matter of when not if.

When a disruptive company changes how people spend money, you should pay attention … especially in a $400 billion industry.

Lottery.com isn’t a pipe dream. It’s a real company with actual revenues.  

  • 2020 revenues were $9 million. 
  • In 2021 it’s on track for $71 million in revenue—year-over-year growth of nearly 700%. 
  • 2023’s projected revenue is $571 million with gross profits of $205 million.
  • By 2025 it could reach $400 million in profits on $1.1 billion in revenue

Its current share price of $8.65 puts the market cap near $443 million.

A conservative price target, five times 2025 earnings, puts the share price at $40+. But that doesn’t account of future expansion.

The global lottery market is worth about $400 billion annually.  For comparison, sports betting is about $85 billion. DraftKings Inc. (DKNG)’s market share is about 25%, and its market cap is $23 billion.

If Lottery.com can capture just 10% of the market share, a comparable market cap puts its share price at $770.

But there’s an obstacle it must overcome first…

The SPAC Pattern

After the merger SPACs have been getting pretty beat up. Take a look at these charts:

VLTA 1-day candles – Chart via thinkorswim
ROVR 1-day candles – Chart via thinkorswim
CCCS 1-day candles – Chart via thinkorswim

They all dip after the merger only to squeeze higher in the weeks that follow.

LTRY’s chart is in this classic dip pattern. I’m more bullish than ever on the stock. I’ve got cash on the side and am waiting to buy more. These dips tend to bottom between $8 and $6 so I’m looking to buy at $7.

From the charts above these dips don’t bounce back quickly. So there should be multiple opportunities to buy once the bottom is established.

Please remember this is my opinion and there are no guarantees. Manage your risk.

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