Market Summary (continued)
The week's rally was under the White House threat of Friday tariffs on China. Friday that threat became reality. The White House announced $50B in tariffs on Chinese goods via a 25% tariff rate. China vowed a response and in the first hour of trade delivered it: soy beans, whiskey, beef and some other US products. While it was hoped this stage of the trade reformation talks could be avoided, they are now here.
Stocks struggled as the possibility became reality. Futures opened sharply lower. When the session bell rang stocks opened lower but then dove lower after the first half hour as China announced its tariffs.
That sharp 10 minute drop was met with equally sharp buying, snapping the indices right back up. Didn't turn positive, but immediately jumped back into the range. Stocks range-traded into mid-afternoon. Then at 2:00ET buys hit and jumped stocks to session highs, trading basically flat from the Thursday close. The move waffled some into the close but managed to hold a decent part of the bounce.
All indices managed a very solid move off the session lows that frankly were never that low. Keep in mind it was expiration Friday and that means holdings will be shuffled to position for next expiration. The tariff news was fortuitous in a way as it assisted some in the shuffle. Then the market showed a rebound to near flat: the dip was bought. Fairly clear expiration shuffling and positioning with the assist from the tariff news.
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It was another week to take some gain with the indices and leading stocks breaking higher once more. It was also expiration week and we had some positions that continued to run toward expiration so we let them work as long as we could. The result was some big gain in the bank as we initially took some gain on the move to the first target, then let half or so of the position continue working for us with the pressure to take profits removed.
HD (The Home Depot, Inc.)
Some June options were left from the April 26 purchase of $180.00 strike calls for $5.50. We sold them for $21.40, banking 289%.
ARWR (Arrowhead Pharmaceuticals, Inc.)
Some June calls were left over here from a position entered on 5-7. We sold them for $4.30 after buying at $1.19. That was a cool 261%.
HTHT (Huazhu Group Limited)
Picked up this position 5/1 as a pre-split play. It split and still ran higher. Our options bought at $2.65 split-adjusted were sold for $12.00 on 6/13, letting us bank 350+%.
MRO (Marathon Oil Corporation)
Worked laterally all week and we sold the rest of the January $18.00 calls bought at $1.30 for $3.25, banking 150%.
DVA (DaVita Inc.)
Bought 5/17 at $67.53 and some July $65.00 calls for $4.20. DVA hit the initial target 6/11 and we sold half the options for $8.25, banking 95+%. Sold half the stock for $72.45, banking 7.3%.
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Here's a leader play and our current analysis.
STATUS: AKAM broke higher in early June from a 3 month cup with handle base and has slow-walked up the 10 day EMA. Flat Thursday, started Friday with a gap lower near the 10 day EMA, then reversed for a gain and a move to a new high on very solid volume. It may be there was some expiration involved in the volume, but it is a very nice pattern, and if AKAM continues upside it is a buy on this continuation of the breakout move.
Volume: 3.397M Avg Volume: 2.177M
BUY POINT: $82.06 Volume=2.5M Target=$97.94 Stop=$76.32
POSITION: AKAM AUG 17 2018 82.50 C - (42 delta) &/or Stock
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BOX (Box, Inc.--$26.78; +0.06; optionable)
STATUS: Nice breakout and rally started the last week of April, taking BOX to a new high in mid-May. From there BOX did not collapse but has put in a 4 week test back to the 50 day MA, working laterally there into last week. Thursday volume jumped back above average for the first time in two weeks as BOX tried a break higher. Friday a dip lower early with the market, then a recovery to positive. Looks as if BOX has put in the test, and if it shows a solid upside break this week with continuing good volume, we want to move in.
Volume: 5.392M Avg Volume: 5.452M
BUY POINT: $26.96 Volume=6.5M Target=$32.89 Stop=$25.07
POSITION: BOX SEP 21 2018 27.00 C - (54 DELTA) &/or Stock
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ATR (AptarGroup, Inc.)
Our Success Trading Group will be watching closely for entry points next week. We currently like AptarGroup, Inc. (Ticker: ATR) at its current price for new positions.
Our Success Trading Group closed
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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AAN - Aaron's, Inc. is currently trading at $43.86. The August $43.00 Calls (AAN20180818C00043000) are trading at $3.10. That provides a return of about 6% if AAN is above $43.00 on expiration Friday in August.
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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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