Dear Subscriber,

First off, a hearty welcome to all our new subscribers! What a time to be a Transformity Investor! 

Let me first take you back to our VTIQ call on April 22--just a few weeks ago--for context.  

"This is a POUNDING Table Buy for VTIQ shares Under $15-$18. We are lights out crazy about this company. I am pounding the table for you to buy the VTIQU today <$18 which has one share of stock and a warrant to buy another share at $11.50--and put it away and not look at it for 24 months.  

NOTE: I fully expect NKLA to double or triple in price the first days it is available for public trading like Tesla did after they ring the NASDAQ buzzer and spend the next 48 hours on a mammoth media tour."  

To be there for the open, you have to be in BEFORE the reverse merger transaction close in late May/early June (note the vote is this Wednesday with the merger closing the next trading day Thursday). 

Well, I was wrong--the 2x-3X move happened BEFORE the IPO.

Our April 22 subscribers are in VTIQ for around $13-$15 on April 23--they are close to triple aka three-bagger. Many also picked up the VTIQU under $20 and are up 150%+.

The VTIQ melted-up in a classic dot.com parabolic move to $35.28--and crashed down to $20.25

IN our May 19th update, we included the technical support levels and said:

We will raise the Buy under to VTIQ $22 VTIQU $28 ahead of the early June merger. 

IF VTIQ sells off down to under $22 or hits 20-day moving average at $18 or VTIQU to under $25--those are TABLE POUNDING entry points for news subscribers! "

Well dang if it did break $22--and our new subcribers got a great break and our old subscribers (and our managed accounts) loaded up some more VTIQ and VTIQUs!
 
We then added VTIQW warrants on May 16 for both our All-Access members and Regulars in a "lotto ticket" play: June 19 VTIQ $30 calls under $2.20. Those call options are now selling for $7.50 in the aftermarket tonight. That's nearly a 4-bagger with gas in the tank for more. 

But the biggest story I need to share with you all is this: based on the 40+ texts I personally received from our All-Access members (who pay $495 to have all-access to me and our team) and email and Drift messages from our Regulars, it appears that many of you are sitting on huge VTIQ $$ profits.

Some with as much as $500,000+ in profits in literally a few weeks from our biggest VTIQ All Access whales. But whether you have earned $500k on our call or $5000, ALL our heads are spinning and we are reliving 1998-1999 when our dotcom stocks like Microstrategy (MSTR) and Yahoo and Dell and Qualcomm and all the optical stocks were moving up and down $50-$100 per day!    

Now late last week we raised the buy under price for VTIQ to $28 saying "NEXT WEEK is the BIG SHOW for Nikola Motors closing on the merger and raising $500 million in additional capital." We raised the VTIQU stock + warrants unit buy under price to $42 and the VTIQW warrant $12 or better.

Well, those buy under prices got blown out of the water last Thursday, Friday, and today. And in the after-hours tonight, VTIQ is trading above the ALL Important $35.28 peak which was the May 12 parabolic top move that was hit in 14 trading days post after our initial BUY under $15 and VTIQU >$18 advisory on April 22 (which profit-taking took back to the $22 bottom as we talked about in our "Bottom is In" Alert on May 19.)

Here is my point: My quick guesstimate it is our average All Access member has at least $100,000 in shares, warrants and units now worth roughly $300,000.  My best guess for our Regulars from April 22 is $50,000 now $150,000.

Doing that math base on our number of subscribers means our Tranformity Investor subscribers (and not counting our #millions in TR Capital Management managed accounts) that just our subscribers alone are sitting on $30-$40 million in VTIQ profits.

$30-$40 million in profits is a number I do NOT take lightly.  This stock has already changed the financial lives of hundreds if not thousands of our subscribers.

And VTIQ stock trades 4 million to 8 million shares per day which, on a 30 million share public float, means every 5-8 trading days the ENTIRE share base pre-merger (which happens on Thursday this week AFTER the Board of Directors vote at 10 am on Wednesday) turns over with NEW shareholders. And THAT means we have a lot of day traders and momentum swing traders (1-3 day swings) now in the stock. 

We also have a lot of GenZ and Millenial True Believer stockholders. How do I know? Because when you look up the stock trading holdings at the Millenial stock trading app Robinhood, you see VTIQ and DKNG (DraftKing--another $10 to $45 SPAC deal) in their top 50 stocks traded per day. 

The Game Plan This Week

First off, I am NOT your financial planner or tax consultant. If you can harvest tax losses or have tax loss carryforwards that cover your tax bill, then congrats--you have I call your own personal non-qualified IRA plan. Capital gains tax is 20% (one year and a day) and, depending where you live, state and Federal short term capital gains depends on your state tax rates and taxable income 2020. But we are in short term capital gains tax rates for stocks held in taxable accounts for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35% or 37%).

PS: One of the most expensive lessons I ever learned was when I did NOT sell a dot com stock because I was already pissed that I had a $million+ tax bill from selling part of a dot com rocket in August 1999 (don't ask--now I'm pissed off again reliving that moment.) Of course, If I had waited until 2020 to sell I would have had another $million AND not had to pay THAT tax till 2001.

So my advice is this:  IF you are sitting on big >$100k profits and you have VTIQ in a non-taxable account (or have your personal IRA of tax loss carry fords in your taxable account to write off against short term capital gains ) then you have a LOT of flexibility here to protect profits IF we see another parabolic move higher past $45.

Let's look at what has just happened to fellow SPAC DraftKings (the online gambling app and technology provider). Here is what that stock did AFTER it completed its merger was completed April 23: it has gone BALLISTIC with it's RSI ("relative strength") at 91-- but it has moved to $45 from $18.50 SINCE it's merger was finally completed. 



Compared to DKNG, the post-parabolic move for VTIQ off it's $22 bottom on May 19 is not ballistic/parabolic at all! Compare the RSI (71-to-91) and the 10-day moving average of the slope of the up move:

Here are the key VTIQ supports. I still think the base case here is the DKNG reaction: Millennials (who never lived the dotcom bubble) will pile into VTIQ AFTER it changes to the NKLA Nikola Motors ticker symbol on Thursday and all the social media "Next Tesla" hoopla begins in earnest.  

KEY point: IF VTIQ goes ballistic run from $35 to $45, we are going to protect those profits with put and call options in our All-Access program. IF YOU are not in All-Access AND you have some serious profits in VTIQ--eh--I think the members of All-Access would tell you they paid for their membership 10-100X on our VTIQ trades alone. Here is how you join the dozens who have already upgraded to guard their monster VTIQ profits (https://transformityresearch.com/register and disregard the One Year term--All Access is a 5 year term buy the credit card processor only accepts one year--we manually enter the five year period). 

Just saying: My team and I have 20+ years trading tech stocks when they go hyperbolic (MSTR XOOM Blackberry Yahoo etc and AMD NVDA OLED MU most recently.) 
 
For instance, in our All-Access program and managed accounts, we have sold way out of the money $20 and $30 put options when VTIQ reached closed above support levels at $22, $27 and now a close above $35.28.  

Why is that important? Because when I sell the $25 put options expiring on Friday, we will have reduced the original cost basis of our $13 VTIQ shares to literally $5! That is, we have taken in $8 per share owned with put option premiums paid into our accounts--and every option has expired worthless! 

That IMHO is the way to ride a rocket stock like VTIQ--to trade around your position with buying and selling options to lower your cost basis without lowering your share count.

We also hold warrants and options as a "share replacement" strategy. For instance, when our original $13 shares skyrocketed in a "Millleniall Monster Melt-Up" to $35 in 8 trading days, we sold some shares on the blow-off high but bought put options at $25 for a few bucks later. When we hit and kept the $22 bottom, we took profits on the put options and turned them into $25 call options to expire on June 5th AFTER the merger.

Net Result: We will exercise those $25 options (one option allows you to buy 100 shares) and still keep my basis below $15 but we created a TON of profits and cash along the way. 

Trust me: I wish I knew all these tricks BEFORE 1999! 

Tomorrow and Wed and Thursday and Friday Plan 

The POTUS just spoke and is threatening to deploy US Military on American soil to "crackdown and lockdown cities if Mayors do not." Deploying the Army on US soil was last done in the Rodney King riots in LA in 1992 (we lived through that one--that image of watching the tanks and Humvees with machine guns traveling up the San Diego Freeway still chills my spine.) 

Stock futures are down slightly--but VTIQ shares are trading UP above the key $35 level. 

Our trading advice remains the same this week: 

1) There are plenty of naysayers out there who are saying that "Nikola is vastly overvalued" and you should not buy the shares until all the founder's shares become unlocked and $1billion in PIPE shares ("Private Investment in Public Equity) are unlocked and 40,000,000 shares within warrants blah blah.

Here is the bear fundamental case against VTIQ by Henrik Alex on SeekingAlpha.com (who describes himself a "Momentum, event-driven, short-term horizon, tech" investor--really?) May 22 at $22 share price:

AVOID VectoIQ Acquisition's Shares Ahead Of Nikola Merger After This Week's Rally

• VTIQ is Blank Check Company stock rallies ahead of the proposed reverse merger transaction with zero-emission transportation start-up Nikola Corporation.

• Pro forma market capitalization eclipses $10 billion, more than triple the valuation underlying the transaction with VectoIQ.

• The current free float of 23 million shares represents just 5.7% of the combined company's outstanding shares.

• Upon closing, founder and CEO Trevor Milton will be selling 7 million shares at a price of $10 back to the company for $70 million (actually to the underwriters). 

"Investors should abstain from chasing the shares at current levels and rather wait for the public float to increase substantially following the anticipated close of the transaction next month."

How did that work out? How many $millions did old Alex cost investors?

Look this is a VERY extraordinary situation--which has worked out extraordinarily well for us IF YOU followed our directions. It looks like ol' Alex was still popping pimples in the go-go dotcom days. Oh and he could have made the same case on Draft Kings as well...and cost investors more millions. In fact he did!

Final Point: The Draft King melt-up scenario IS our base case because the situation and circumstance of both SPAC conversion to real exciting story stocks are incredibly similar. It's about an 80% chance. 

It DOES take courage to NOT "just take profits--I can't take the volatility pain anymore."

Last time I DID THAT it was a $million mistake--I don't want you to make that mistake. 
 

• VTIQ is that very rare situation like TSLA and DKNG (which was on our buy list and we failed to pull THAT trigger--doh!) where the stars are aligned: we have millions of GenZ and Millennials who just got $1200 from the government and many get $1200 a week in unemployment cash burning a hole in their Robinhood/Etrade accounts.

• They are the new generation of dotcom day/swing traders that LOVE climate change fighting green stocks (see TSLA). 

• They have no experience in a parabolic stock situation--they think VTIQ is going to $100 (as I do--but not in a few weeks ok?) and this run-up is normal and many are putting the shares in their "long term investment" fund.

• For many, VTIQ and/or TSLA are the first stocks they ever bought and, since they went up so much, they are now stock market geniuses. IF you don't believe me, go on Twitter and enter $VTIQ $TSLA of @nikolamotors and read the comments. Or Reddit. Or Yahoo stock boards--EVERYONE is a genius!!

The BIG Game Plan--Can we Get Another $10 a Share Out of VTIQ???

Whatever chart service you use, put it on 10-minute time frame and use June 1-June 5 and use EMA 20 EMA 10 and EMA 5 to see where support is. IF VTIQ stays above the 5-day and 10-day support in 10 minute intervals, stay with it. If VTIQ BREAKS and closes under the 5 and 10-day 10-minute support, that will be a technical break down and we should assume to technical trading desks will automatically puke out the stock their momentum algorithms have been blindly buying. 

Your chart will look like the VTIQ chart from May 11-May 25


 Here is the DKNG--THIS is the template--YOUR VTIQ Chart should look like this!!!

This chart will continue to go up--UNTIL IT DOESN'T!!!

That is why we run this plan purely on technicals and support--the way momentum and algorithm-based rules trading desks work. At 90%+ RSI--DKNG is WAY oversold...but it can get even MORE oversold!!

That is the point that the Alex dude does not get--we are now in the land of the momentum robot traders. These bots don't know VTIQ from a pork belly. All they know is it is going up to higher highs every day--and they will buy what is going up until it doesn't.

At this point, WE ARE JUST ALONG FOR THE RIDE and the Bots and Millennials are running the short term show.  

Plan B: If you don't have the time or stomach to ride this rocket potentially to a 95 RSI and $45, then just use sell stops at the low of the previous day and don't open your trading account--I MEAN IT.

You don't have to see the brain cramping volatility--you just raise your stops at the end of the trading day. For instance, the low of the day today in VTIQ was 29.61. If you set that sell stop (market stop--don't be greedy) then don't do anything tomorrow!

See where the lowest trade was tomorrow is, and move your stop up to that price (if it closes or trade below 29.61, you are the proud owner of a shit ton of profits. If not, you have even more profits. 

This game goes on to about where DKNG is right now--I will short DKNG via options if it breaks down below lowest trade from today. 

BUT Grasshopper: The Key is that when a stock you own is in the MOMENTUM ZONE--you let it ride and ride up your stop-limit orders. IT WILL BREAK DOWN eventually--but that could be 100-200% higher in 4-5 trading days. 

Since the average stocks go up about 7% a year, every 100% gain we get is like nearly 14 YEARS of stock market profits. 

PS: on Thursday, one share of VectoIQ will translate to one share in the new company, to be called Nikola Motors and trade under the ticker NKLA. One warrant in VectoIQ ticker VTIQW will become one warrant in Nikola NKLA. The warrant gives the holder the right to purchase a share of the underlying security at $11.50 for five years and can be exercised 30 days after the close of the business combination.
 
But there is a caveat to this: If the stock were to close above $18 for 20 out of 30 days following the business combination as it surely will --Nikola Motors Inc. (NKLA) can redeem the warrants for what essentially amounts to .01.

Key point: IF called for redemption, the warrant holder can allow it to be redeemed (which no one would obviously), sell the warrants on the open market (at close to the spread between $11.50 and the current NKLA price, or exercise the warrant and buy shares.

Warrant holders should be ready to exercise their warrants and buy shares in July at $11.50--THAT is how you buy what we firmly see as the "Next Tesla" (see our research report on our web site) at $11.50! 

HANG ON and enjoy this ride. Plan for your next exotic trip that you take with loved ones you will pay for with some of these profits.  

Toby