5 Stocks That Could Be Plagued by Pandemic Fatigue

Hey Traders,

Sure, the stock market last week encountered some speed bumps due to re-emerging fears about COVID-19.

Things look pretty bleak in Brazil, for instance, and new coronavirus variants are reportedly hitting parts of Europe pretty hard …

But here in the U.S., the number of vaccinated Americans continues to grow, and with many parts of the country seeing warmer weather, there remains a collective sense of optimism on Main Street.

So the question right now isn’t IF the pandemic will end … it’s WHEN.

And something I don’t find many pundits talking about these days?

Stocks that could take a hit as the global economy reopens.

These are pandemic-popular stocks that I wouldn’t be surprised to crop up on my Robinhood Trader scanner for eventual long puts or other bearish option trades …

So today, I’ll review five stocks that could be plagued by Pandemic Fatigue on our way back to “normal.” 

(And stay tuned for Monday’s Pit Report, where I’ll outline some potential reopening winners on Wall Street.)

Zoom (Ticker: ZM)

ZM may be the most obvious stock on our list, as last year’s stay-at-home orders fueled a surge in video technology demand.

Nearly everyone I know has accidentally committed at least one Zoom faux pas in the past year, from getting caught unmuted to cringier (but not Jeffrey Toobin-level) gaffes.

At first Zoom felt like a lifesaver, though, keeping us connected to the outside world during quarantine. Heck, even Saturday Night Live did a semi-season from home.

And the ZM share price certainly reflected that …

They started 2020 in the mid-$60 range, and rode their 50-day simple moving average (SMA) to peak just shy of $600 in October — a gain of more than 800%! 

ZM with 50-day SMA – courtesy of StockCharts

However, just as many Americans now have “Zoom fatigue” — Citi’s CEO recently implemented “Zoom-free Fridays,” in fact — ZM stock has also lost some luster already.

The shares have backed down from their highs, now testing their footing in the low $300s, and once workers start returning to offices around the world, there could be more downside in store.

Farfetch (FTCH) and Wayfair (Ticker: W) 

Online retailers have seen a surge in activity over the past year, for obvious reasons.

Courtesy of U.S. Census Bureau

However, once the global economy reopens and building-capacity limits normalize, cooped-up shoppers could scurry back to brick-and-mortar stores in a hurry.

That might be bad news for stocks like FTCH and W.

FTCH was pactically a penny stock around the March 2020 lows, but rocketed to a peak around $73 in February 2021 — once again with help from its 50-day SMA.

FTCH with 50-day SMA – courtesy of StockCharts 

However, in 2021, FTCH shares have been putting in a series of lower lows, and cracked that SMA around the beginning of the month, with the stock now flirting with $52.

Wayfair stock also enjoyed a healthy surge following the March 2020 bottom, but has struggled to take out its August 2020 top around $350.

W daily chart – courtesy of Stockcharts

As brick-and-mortar retail locations open back up, these pandemic-inflated e-tail stocks have room to fall if online demand drops.

Draftkings (Ticker: DKNG)

The closure of casinos and sports books helped DKNG off its March 2020 lows, and news of a Michael Jordan investment in the sports-betting company gave the shares some extra oomph in September.

After touching a high around $64 around the beginning of October, DKNG retraced to around $35 by the end of November, only to rebound along its 50-day SMA over the subsequent months.

DKNG with 50-day SMA – courtesy of StockCharts

DKNG just took out that September peak in early March, and now the shares and their 50-day are converging in that key $64 area.

As in-person gambling comes back en vogue, DKNG could become passé.

Peloton (Ticker: PTON)

PTON took off like a bat out of hell last spring, soaring from about $17 in March 2020 to roughly $140 in October, where the stock finally took a breather.

The shares hit another “runner’s high” in early January, briefly toppling $170, but have since become winded — and are now barely clinging to triple-digit territory.

PTON daily chart – courtesy of StockCharts

Peloton became a household name as gyms were forced to shutter, even becoming a regular fixture in Saturday Night Live sketches.

But with the cold weather behind us (I hope), we could see a RE-cycling boom (get it?), as more bike enthusiasts swap their Peloton sessions for actual outdoor exposure.

The reopening of gyms around the world may only exacerbate this trend…

As well as PTON’s recent pullback on the charts.

In closing, while we aren’t out of the coronavirus woods quite yet, once again — I wouldn’t be surprised if the global reopening puts stocks like PTON, DKNG, W, FTCH, and ZM on my Robinhood Trader scanner for eventual bearish option trades…

And remember, watch your inbox for my list of stocks that could GAIN ground once we start putting COVID in our rearview…

Enjoy the rest of your weekend, Traders!

Your Only Option,

Mark Sebastian

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