> >From "The Daily" by Jon Johnson at InvestmentHouse.com
Market Summary (continued)
The test/pullback/near term correction -- you make the call -- continued Friday after a not so good but really good jobs report. So full of contradictions to start the report, but the session was, in a way, so full of contradictions as well.
Down again with SP500 and DJ30 selling deeper, sharper selling on NASDAQ, NASDAQ 100, and of course SP400 and RUTX dove lower again.
Yet, in the midst of the selling and calls of a market meltdown, Goldilocks is dead, etc., the indices started hitting some support, individual stocks as well. Many were actually holding it.
DJ30 at the 20 day MA, SP500 at the 50 day MA. NDX broke the 50 Day MA but held support at the early September low. SP400, RUTX at the 200 day MA, tapping it at the low, bouncing. Way oversold indices, logical place to bounce.
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As the market started to show it was ready to pullback early week, we banked some gain on some October options that showed great action into October and thus we wanted to let them work until they stalled. It was good timing and we banked excellent gain.
BA (The Boeing Company)
It took awhile to take off, indeed making a couple of touch and goes at the 200 day SMA, but when BA took flight it made us money. We moved in on 7/26 with some October $360.00 strike call options at $14.80 with the stock at $359.19. BA just cleared a flag pullback and looked great. It immediately stalled and sold to the 200 day SMA. Gapped to that level so we stayed in to see if it would gap back up. It did the next session, surging nicely on volume. Recovered nicely but then, back to the 200 day SMA intraday in early September. A higher low, reversed intraday, left it on. That was the bottom. BA rallied from $336 to $372 in 2 weeks. Tested late September. Two Fridays back it started up off the 10 day EMA test and rallied into Wednesday. BA hit our target along the way but we let it run until it was tired. When it started to drop late week we sold the options for $31.20, banking a hard fought 110%. That one was work. After BA tests, however, we will see if we can get a new entry.
ROKU (Roku, Inc.)
We entered this one ages back as well it seems, moving in on 8/16 as ROKU broke higher off a 10 day EMA test after a gap breakaway move. We picked up the stock at $57.91 and some October $55.00 strike call options for $6.42. This one was much easier than BA. ROKU rallied to $64, then gapped lower late August, but managed to hold the 20 day EMA. Broke back upside early September then put in a slow, steady 3 week move into last Monday. Tuesday it tried higher but then started to reverse. With the October options it was time to bank the gain after a great move. We sold the stock for $71.11 banking 22+%. We sold the October options for $16.05, banking 150%. ROKU then fell back to the 50 day EMA Friday, showing a doji, and if it bounces from here we are ready to move in yet again.
TJX (The TJX Companies, Inc.)
Another slow moving, long riding play. We moved into TJX on 7/19 at $97.26 with some stock and some October $95.00 strike call options at $5.40. TJX was long, but it was easy to let it work as it never challenged our intestinal fortitude. It would go into dormancy at times, as it did after we moved in, but then it would move upside. It broke higher in August, then late August gapped upside sharply and continued higher into early September. It tested and we let it; working well. Held the 20 day EMA for a week then moved higher into late September, just moving to a new high when the market selling hit. Running out of time on the options and when we saw TJX fade off the Monday new high, we sold the stock for $110.23, banking 13%, and the October options for $15.00, banking 175+%.
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Here's a leader play and our current analysis.
STATUS: 50 day MA test. ADBE is back at the 50 day MA and looks ready to make another move higher off that support. Used it in early and late September and in the recent market weakness, is back there again. Sold Tuesday to Friday, Friday showing a very nice doji with tail closing over that key level. Good volume on Thursday as it tested and held the 50 day, bouncing off the low, and again Friday as it sold then rebounded to basically flat. We want to move in as ADBE bounces up off this test, looking for a move to 280 initially. That move lands a 55%ish gain on the call options.
Volume: 3.099M Avg Volume: 3.024M
BUY POINT: $266.12 Volume=3.5M Target=$280.00 Stop=$261.46
POSITION: ADBE DEC 21 2018 265.00 C - (50 delta)
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CRM (Salesforce.com--$155.07; +0.16; optionable): Sales staff software
STATUS: Test 50 day MA. A common fade in the leaders, CRM hit a new high Monday then sold back in the market selling. Not a rough selloff at all, just a test of the 50 day that has bounced the stock in April, June, July and September. Sold Thursday near the 50 day, then Friday tested down close to the 50 day and rebounded to a nice tight doji with tail. If CRM bounces again and can hold the move, we want to move in for an initial target as a 10 point move for 55%ish on the options, then see if it can continue in a good Q4 rally.
Volume: 4.963M Avg Volume: 5.427M
BUY POINT: $156.64 Volume=7.2M Target=$167.00 Stop=$153.31
POSITION: CRM JAN 18 2019 155.00 C - (54 delta)
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MSFT (Microsoft Corporation)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Microsoft Corporation (Ticker: MSFT). We are watching several stocks and are looking forward to trading next week.
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NOA - North American Construction Group Ltd. is currently trading at $11.69. The November $10.00 Calls (NOA20181117C00010000) are trading at $1.90. That provides a return of about 6% if NOA is above $10.00 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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