Tech support

  • GDDY bounced this week after 16% sell-off last week
  • Stock dropped to long-term support before rebounding
  • Copper attempts to extend rally

As far as the tech sector goes, web hosting stock GoDaddy (GDDY) hasn’t had a bad 2022. While the Nasdaq 100 (NDX) tech index was down around 33% for the year as of Wednesday, GDDY was only in the red by 18%.

A little more than a week ago, that year-to-date loss was less than 3.5%, but a four-day, 16% slide dropped shares to their lowest level since April 2020:

Chart 1: GoDaddy (GDDY), 10/19/22–11/9/22. GoDaddy (GDDY) price chart. Bounced off support.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

As of yesterday, the downturn had climaxed with a 7% sell-off on November 4 after the company reported its Q3 numbers—topping earnings estimates, but guiding lower for Q4 and 2022 overall.1

Although GDDY retreated modestly on Wednesday, it’s still up nearly 3% over the past three days—and more than 7% from its November 4 intraday low of $64.65, which the weekly chart inset shows was the most recent test of an extended support level.

From this longer-term perspective, the stock has been “stuck” in a broad range, trading mostly between $66–$90 since July 2020. But the individual upswings off the bottom of that range—which have often been brief, high-momentum bursts—have represented percentage gains of 20% or more.

Meanwhile, GDDY’s implied volatility (IV) profile shows options volatility for the next few expirations is close to the 30-day average, but January options have slightly lower IV overall:

Chart 2: GDDY implied volatility constellation, 11/9/22. Lower IV in January options.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

It’s just one facet of the trading environment, but because lower-IV options sometimes have lower premiums relative to high-IV options, January options may be slightly more attractive to option buyers, while sellers may focus on expirations with higher IV.

Copper topper: Metals and mining stocks have been on a tear over the past five days, and while gold and other precious metals have rallied, one industrial metal has made an even bigger move. December copper futures (HGZ2) pushed to a 10-week intraday high on Wednesday, challenging resistance at their August high:

Chart 3: December copper futures (HGZ2), 8/23/22–11/9/22. Challenged August high.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Although prices pulled back to close lower, copper nonetheless maintained the up move that began on November 4 when the market posted its biggest up day since 2009, amid a falling US dollar and reports that China (the world’s biggest copper importer) would lift some of its COVID restrictions.2 Despite the recent bounce, though, copper is down nearly 25% from its March highs.

Market Mover Update: On Wednesday, Meta (META) announced it was laying off 13% of its workforce—more than 11,000 employees—and its stock rallied nearly 9% intraday.

Today’s numbers include (all times ET): Consumer Price Index, CPI (8:30 a.m.), Weekly Jobless Claims (8:30 a.m.), EIA Natural Gas Report (10:30 a.m.).

Today’s earnings include: Ralph Lauren (RL), Tapestry (TPR), Beazer Homes (BZH).


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1 GoDaddy (GDDY) Tops Q3 EPS by 9c. 11/3/22.
2 Copper Has Best Day Since 2009 as Metals Rocket on Dollar Drop. 11/4/22.

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