Market Summary (continued)
March began Friday, and after a high-volume stagnant end to February, March blew in some solid index gains. After some rather tepid US economic data -- yet again -- many see the Fed's easy money policy as appropriate, or that China's on again/off again economic data ('on' Friday with better manufacturing data after Thursday's extraordinarily weak import/export data) trumped the weaker US data. Or perhaps Larry Kudlow's extolling the possibility of a "remarkable, historic" trade deal had something to do with it. Or, it was just time for new money to hit the market on a new month.
Whatever the cause or synergistic melding of events, stocks gapped higher, held the gap -- at least after a morning dive back to near flat -- and closed with some rather decent gains.
As far as the indices, there was not anything really new accomplished Friday. Last week the indices bumped resistance (or in SP400's case, continued the break) then faded modestly. Friday's new money injected new life, but as noted, did not break that resistance. Constructive action all week as the indices and stocks tested back to near support.
No breakouts Friday for the indices perhaps, but they tapped resistance, faded to near support, then got right back at it. Indeed, stocks such as GOOG broke out over some resistance and AMZN actually showed some life on much better volume after four weeks of dormancy. Many other stocks continue to move well or set up as well across many sectors and industries: software, chips, drugs, energy, healthcare -- there is enough support to fuel a continued move and of course the breakout from the October/December range.
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ZS (Zscaler, Inc.)
Entered ZS as it broke higher on 1/31 as the stock broke higher from a 5+ month cup with handle base. Picked up the stock for $48.25 and May $48.00 calls for $6.10. Nice break upside, good volume. Then . . . nothing much. Faded after a move higher, testing the 20 day EMA. Then a very slow move upside to the second week of February. Then a flat, flat, flat lateral move into this past week. Man, not going anywhere despite the nice base and strong breakout. Well, we decided to let it work into earnings given the great pattern and less than big run into earnings. Worked out. ZS gapped upside Friday and rallied to $60.57. Thank goodness; we were dying from boredom. In any event, ZS gapped and surged. We sold half the stock for $59.22, a 22% gain. Sold half the options for $13, banking 113%.
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Here's a leader play and our current analysis.
STATUS: AMKR is engaged in a two-week test of the breakout from a double bottom base formed on the October and December lows. Surged off the 200 day SMA three weeks back, making the breakout move. Strong volume, strong breakout move over resistance. The test came back to the 20 day EMA Wednesday and has held, showing a doji Friday. MACD posted a nice new high on the break upside; plenty of momentum. Nice first test of the breakout, one of our favorite entry points. Want to see a good upside break with some volume to give us the entry signal. Plenty of room to run for a very nice gain.
Volume: 990.01K Avg Volume: 1.067M
BUY POINT: $9.03 Volume=1.5M Target=$10.84 Stop=$8.42
POSITION: AMKR JUN 21 2019 9.00 C - (57 delta) &/or Stock
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BRKS (Brooks Automation--$32.04; -0.07; optionable): chip equipment
STATUS: BRKS is another chip stock testing the past two weeks to near support, this after a good rally that worked to form the right side of a base. After a gap higher in August 2018, BRKS peaked and fell right into the current 6 month base. The test the past to weeks to the 20 day EMA consolidates a good rally to mid-month. Waiting for a new break higher through the buy point to signal the entry. A move to the initial target near the August 2018 peak lands 20% on the stock, over 100% on the options.
Volume: 504.17K Avg Volume: 569.48K
BUY POINT: $32.74 Volume=665K Target=$39.29 Stop=$30.56
POSITION: BRKS JUL 19 2019 32.50 C - (55 delta) &/or Stock
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URI (United Rentals, Inc.)
Our Success Trading Group will be watching closely for entry points next week on some of our favorite stocks such as United Rentals, Inc. (Ticker: URI) and The Travelers Companies, Inc. (Ticker: TRV).
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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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KL - Kirkland Lake Gold Ltd. is currently trading at $35.27. The April $35.00 Calls (KL20190420C00035000) are trading at $2.15. That provides a return of about 6% if KL is above $35.00 on expiration Friday in April.
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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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