Market Summary (continued)
Stocks stretched the post-Monday gains through Friday, aided by an even firmer conviction - thanks to a jobs report miss -- the Fed would cut rates, and the Administration indicating there would be no implementation of Mexican tariffs.
Stock futures were higher ahead of jobs, fell on the paltry 75K gain in non-farm payrolls, but then reversed to pre-market highs as traders figured a weak number even further strengthened the odds for a near term rate cut. Stocks surged into midmorning then held the very solid gains through the close.
SP500 29.85, 1.05%
NASDAQ 126.55, 1.66%
Dj30 263.28, 1.02%
NASDAQ 100 1.94%
VOLUME: NYSE -8%, NASDAQ -3%
ADVANCE/DECLINE: NYSE +2.8:1, NASDAQ +1.9:1
The action on the week managed to wipe away the late May selling, the second leg lower in the selling from the April peak and the move that broke the head and shoulders patterns through the necklines. Impressive recovery in price.
THE question, of course, is whether this was a repudiation of the break lower. I often say a head and shoulders pattern sets up just to fool you. These appeared to be serious, however, given they made up the second top to the large double top patterns.
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With the down and up week we had plays in both directions.
QID (ProShares UltraShort QQQ)
With the downside dive Monday on the anti-trust worries on the FAANG stocks, we banked the QID gain. We picked up some July $34.00 strike calls on 5/24 for $2.67 as NASDAQ continued to sell after gapping downside the prior session. From there NASDAQ sold steadily with a crescendo Monday. We sold the calls for $5.10, banking 114%.
HIIQ (Health Insurance Innovations Inc.)
Healthcare has shown some buying and we saw HIIQ break higher on 5/31, ready to break from an inverted head and shoulders pattern. We put it on the report, and the next session when HIIQ broke higher we bought the stock for $26.85 and some August $25.00 calls for $4.90. HIIQ moved higher each session then gapped upside and rallied early Thursday to our target. We banked half the stock for $32.70, a 21+% gain. We banked the options for $8.60, a 75% gain.
AMD (Advanced Micro Devices Inc.)
AMD put in a very tight lateral consolidation from April to mid-May. We put it on the report, anticipating a break higher. It did so on 5/28 and we moved in with stock at $28.42 and some July $28.00 strike calls options at $2.38. A very strong break higher Thursday took AMD out of the 8 week consolidation. Friday AMD added a bit more, hitting the target. We banked half the stock for $32.44, a 14% gain. We also banked half the options for $5.10, a solid 114% gain.
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Here's a leader play and our current analysis.
STATUS: ABCD. Looking for some more upside gain from AXSM as it has come back the past 2+ weeks to form an ABCD consolidation pattern. Tapping Thursday and Friday on the intraday lows at the 78% Fibonacci retracement of the early May upside gap and run, then posting a solid Friday advance. Looks as if the pattern in in place, and as AXSM continues upside we want to move in for a run to the prior high. That rally gains 18% on the stock, 55%ish on the options.
Volume: 1.241M Avg Volume: 1.336M
BUY POINT: $22.19 Volume=1.6M Target=$26.45 Stop=$20.64
POSITION: AXSM AUG 16 2019 22.50 C - (57 delta) &/or Stock
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FTNT (Fontinet, Inc.--$73.82; +0.22; optionable): Software
STATUS: Bear flag. After a decent enough move to mid-April, FTNT started some selling. Gapped sharply lower early May, again on May 23. Sold hard on that gap to last Monday, then the rebound to test the 10 day EMA on the Friday high. Closed with a doji Friday, a short tombstone. Low volume rebound. If it continues lower we want to play, and we want to be in for a possible third cap lower. A move to the target gains 50%ish on the put options.
Volume: 1.193M Avg Volume: 1.694M
BUY POINT: $73.47 Volume=2M Target=$66.42 Stop=$75.80
POSITION: FTNT AUG 16 2019 75.00 P - (-50 delta)
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--by the MarketFN STG Team
PEP (Pepsico Inc.)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Pepsico Inc. (Ticker: PEP). We currently like Snap Inc. (Ticker: SNAP) 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. All of these trades are posted on our Main Trade Table for your review during your free membership trial period.
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TER - Teradyne Inc. is currently trading at $45.21. The July $45.00 Calls (TER20190720C00045000) are trading at $2.15. That provides a return of about 5% if TER is above $45.00 on expiration Friday in July.
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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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