Market Summary (continued)
Friday did little to alter the back and forth volatility as AMZN and GOOG earnings helped the market sell off to new lows on this leg lower. Bids returned, however, and pushed the indices back above the Wednesday lows. That turned truly impressive losses to just 1% to 2% declines on the indices. NASDAQ for instance closed lower 151 points but was off 260+ on the low. So there was some recovery.
SP500 -46.88, -1.73%
NASDAQ -151.13, -2.07%
DJ30 -296.24, -1.19%
NASDAQ 100 -2.34%
VOLUME: NYSE +5%, NASDAQ +7%. Volume up on a selloff but also on a recovery off the lows to hold the prior low. Decent enough.
ADVANCE/DECLINE: NYSE -2.6:1, NASDAQ -2.2:1. Was a lot worse before the recovery off the low.
NEW LOWS: NYSE 528, NASDAQ 446. That lower low pushed up the new lows once more.
There was also, despite the up and down from session to session, a steady trend lower. Perhaps the selloff was enough to put in a bounce. Perhaps it was just short covering to end a really weak week. There is so much bottom calling and bottom wishing, at this juncture it is hard to listen to the financial stations and keep a clear view.
That is what makes a follow through to any buying so important. The day to day back and forth action shows the need to have a good day of buying on a reversal, then after that initial move rests, see a return of upside with strength again. That shows that after that initial move buyers want to pick up more stocks. These are usually longer term holders versus the initial short covering moves.
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ACAD (Acadia Pharmaceuticals--$21.74; +0.46; optionable): Biotech
STATUS: ACAD trended lower from October 2017. It sold sharply in April but started to bottom that same month with a double bottom of sorts. As it sold that month, MACD started to rise. ACAD did not follow immediately, however, matching those lows in June, but then fading into August and September with something of a double bottom. MACD continued its improvement, and in the last half of September ACAD shot higher. It cleared the 200 day SMA late September and has spent the time since working laterally along the 200 day. Nice consolidation of the move with ACAD starting to bounce Thursday and Friday. We are looking to move in as the stock continues upside, preferably on some volume.
Volume: 1.736M Avg Volume: 3.171M
BUY POINT: $22.25 Volume=4.6M Target=$26.93 Stop=$20.69
POSITION: ACAD JAN 18 2019 22.00 C - (55 delta) &/or Stock
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Here's a leader play and our current analysis.
STATUS: FATE is testing the 200 day SMA after breaking higher in the second half of September from a 7 month trading range. Nice rally to 17 to end September. October was not as upside kind and FATE faded back to the 50 day MA midmonth, then sold last week to the 200 day SMA. It held and Thursday bounced on excellent volume. Friday it paused with what is likely a continuation doji. Looks as if FATE has made it through the selling more or less testing its breakout. With the good bounce on volume, we want to move in as FATE continues the upside move with a target near that recent high. Seems logical, yeah verily fate, that it should make that height.
Volume: 563.567K Avg Volume: 782.433K
BUY POINT: $13.82 Volume=1M Target=$16.72 Stop=$12.85
POSITION: FATE FEB 15 2019 12.50 C - (66 delta) &/or Stock
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FOSL (Fossil--$21.16; -0.26; optionable): Retail stores, watches and accessories
STATUS: After reaching a high in June, FOSL has trended steadily lower in a rather orderly pullback below the 50 day MA. It finally sold to the 200 day SMA last week, worked laterally, then popped upside Thursday. Friday showed a doji similar to FATE, and it looks as if that is a continuation doji, i.e. the stock will continue higher off this move. We think the pinch between the 200 day on the low and the 50 day MA on the high will yield a breakout move from the current 4.5 month downtrend. We want to play a strong breakout move for a run at the 28 level where the early August peak resides.
Volume: 1.75M Avg Volume: 1.377M
BUY POINT: $22.54 Volume=2M Target=$27.96 Stop=$20.71
POSITION: FOSL JAN 18 2019 22.00 C - (51 delta) &/or Stock
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WMT (Walmart, Inc.)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Walmart, Inc. (Ticker: WMT). We are watching several stocks and are looking forward to trading next week.
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PBR - Petroleo Brasileiro S.A. - Petrobras is currently trading at $16.24. The November $16.00 Calls (PBR20181117C00016000) are trading at $1.29. That provides a return of about 7% if PBR is above $16.00 on expiration Friday in November.
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| The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.|
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