Market Summary (continued)
Another week higher slowed at the end as the indices bump at resistance. Still . . . the resistance did not immediately repulse the upside move. Instead, the indices are sliding laterally just below, resting after a solid second leg higher. Or, in the case of SOX, moving right on up through resistance. Not a bad reaction at all.
SP500 -0.38, -0.01%
NASDAQ -14.59, -0.21%
DJ30 -5.97, -0.02%
NASDAQ 100 -0.30%
VOLUME: NYSE -11%, NASDAQ -6%. Not bad price/volume action on a flattish day; no heavy selling as volume backed off below average even farther.
ADVANCE/DECLINE: NYSE 1.3:1, NASDAQ 1.2:1.
Indeed, many of the rally's early leaders are testing while others follow their early lead. AMZN, TEAM, NOW, CRM -- solid moves higher, now testing laterally, setting up the next move.
While the resistance confronting the second leg of the rally is still there and is serious, the action thus far suggests these leaders can break higher and -- lead -- once again. We will definitely be looking at new positions on them as they make the next break higher. Nothing like concentrating on winners; that really leverages your gains when they are in a run.
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A week of rallying in the second leg of the recovery was prime for taking gain on positions started with the rally.
NFLX (Netflix, Inc.)
A great week for NFLX, indeed another one. We picked up NFLX on 1/7 as it continued the prior session's gap over the 50 day MA. We entered the play with some February $305 call options for $25.98 with the stock price at $306.91. A steady move higher -- though it paused Wednesday -- gapping and rallying through the 200 day SMA Friday. That took NFLX to our initial target and we banked half the gain for $41.95, a 60+% gain. Earnings Thursday and interested in letting it run to the results to bank more gain.
TEAM (Atlassian Corporation PLC)
Continued higher early week, breaking out Monday with a strong move from its 3+ month double bottom with handle base. We had some January options, and as TEAM bumped the September high and our target midweek we banked some gain. We were holding January $85.00 strike calls purchased for $6 when TEAM traded $84.82. We sold them for $11.70, banking 95%.
CRON (Cronos Group, Inc.)
Moved in on 1/3 as CRON continued the new break higher started 1/2. Picked up the stock for $11.57 and some March $11.00 strike call options for $1.81. Friday CRON reached the early December high and our initial target. Sold half the stock for $13.84, banking over 19%. Sold half the options for $3.1, banking over 70%.
Others we took some gain on:
TECD (Tech Data Corporation)
Purchased February $80.00 strike call options 12/20 ($5.10), sold half 1/8 ($7.50) banking 47%.
Also banked gain on FIVN, VRSN, WDAY, SPLK.
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Here's a leader play and our current analysis.
STATUS: Another stock that has trended lower, this one from late July. Bottomed late December, MACD put in a higher low, rallied up to and through the 50 day MA to start January. Lateral-ish move last week, in good position to move higher and chase the MACD rising rapidly above the stock price. The initial target is a gap fill from a late October gap lower. That move lands an 80%ish gain on the call options.
Volume: 3.758M Avg Volume: 4.571M
BUY POINT: $91.61 Volume=5.5M Target=$101.24 Stop=$88.40
POSITION: EA MAR 15 2019 90.00 C - (55 delta) &/or Stock
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SDS (UltraShort S&P500 ETF--$39.88; +0.01; optionable)
STATUS: SDS is a way to play SP500 short while playing an upside call option. SDS is the inverse of SP500, and thus over the pat two months it has formed an ABCD upside pattern, testing back to the 50 day EMA and the top of the October/December range Wednesday to Friday. Excellent setup if the market is to break lower. A move to the target lands a 100%ish gain on the call options.
Volume: 4.253M Avg Volume: 9.015M
BUY POINT: $40.72 Volume=14M Target=$44.99 Stop=$39.31
POSITION: SDS FEB 15 2019 40.00 C - (51 delta) &/or Stock
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VZ (Verizon Communications Inc.)
Our Success Trading Group will be watching closely for entry points next week. We currently like Verizon Communications Inc. (Ticker: VZ) at its current price for new positions.
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7 years with 0 losses on our Main Trade Table. In fact, we closed 100% winning trades for the calendar years 2016, 2015, 2013, 2012, 2011, 2010 and 2009 (we still have 1 open position from 2017 (all others were winners) and 1 trade that we opened in 2014 was closed as a losing trade). All of these trades are posted on our Main Trade Table for your review during your free membership trial period.
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CZZ - Cosan Ltd. is currently trading at $10.11. The March $10.00 Calls (CZZ20190316C00010000) are trading at $0.55. That provides a return of about 6% if CZZ is above $10.00 on expiration Friday in March.
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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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