Market Summary (continued)
The midcaps led the charge to the new highs on the week, hitting it Tuesday followed by RUTX. SP500, NASDAQ took a bit more time, but got there -- barely. New High Anxiety stepped aside for the session, but these were not great breaks for the big cap indices. Perhaps they will follow the RUTX, SP400 lead and put some mileage on the new highs next week.
DJ30 and SOX were not dogs, they just have farther to go. DJ30 cleared the late February peak Tuesday, the penultimate high before getting to the January high, gave it up, but then rebounded Friday. SOX rallied well Tuesday through Friday, clearing the 50 day MA's with the Friday gap and rally, holding the gains to the close. As noted, not new highs, but not bad at all.
Notably, no new high for NASDAQ 100. It is not the big techs, or at least not a lot of them, moving to highs.
Rah, rah for the new highs. Lots of ebullient spirits Friday post-close, a bit too ebullient for a Friday. New highs do that, even if they are on light trade. Then again, the market has moved with light trade for about . . . ever. So it seems.
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The market spreading out the upside on the week allowed us to take some gain from several areas.
AMD (Advanced Micro Devices, Inc.)
Picked up AMD positions on 8/6 as it broke higher from a 10 day EMA test after a breakout. Stock at $19.89, January $19.00 strike options at $2.79. Then . . . we waited. It was a slow, snail-like crawl up the 10 day EMA into last week. Teased greatness, but had to overcome all the other chips struggling. Finally a bid hit Wednesday and it shot higher Thursday and Friday, touching the initial target. We sold half the stock for $23.45 (20+%) and the options for $5.50 (+97%).
DOCU (DocuSign, Inc.)
Picked up DOCU 8/2 as it broke higher off a 50 day EMA test. Stock for $58.88, September $57.50 call options for $5.90. Nice rally the following week, but then DOCU slid back to the 50 day SMA. Held there until last week when it jumped Monday and then rallied to the initial target on Friday. Hit it, we sold half the stock for $66.95 (+13.7%) and half the options for $10.20 (70+%).
NUVA (NuVasive, Inc.)
Bought into NUVA 8/9 with stock at $64.26 and December $60.00 strike calls at $4.90. NUVA exploded higher late July and was testing that move. We picked it up as it jumped higher. NUVA was pretty solid from the get go. Rallied up the 10 day EMA into Monday, hitting our initial target. We banked some of the gain, selling half the stock for $70.25 (9+% gain) and half the options for $11.00 (124%).
SFIX (Stitch Fix, Inc.)
Entered on 8/9 as well, picking up the stock for $31.17 and some September $30 strike calls for $3.60. SFIX jumped higher, then tested laterally through last Monday. Then it took off, racing upside and hitting our target Tuesday. We sold some stock for $36.25 (16.3%) and the options for $6.1 (69%).
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Here's a leader play and our current analysis.
STATUS: Cup w/handle. After a long selloff from June 2017, this year CRUS has formed a base, a cup with handle spanning mid-January to present. Bottomed April to June, forming the handle late July to August. The handle consists of a triangle formed over the 50 day EMA the past four weeks. It has bumped up against the 200 day SMA early August, and after rebounding last week, is bunching up against that level the past three sessions. Our play is to move in as CRUS breaks through the 200 day SMA and makes that move stick.
Volume: 490.528K Avg Volume: 1.021M
BUY POINT: $44.34 Volume=1.5M Target=$52.00 Stop=$41.83
POSITION: CRUS DEC 21 2018 45.00 C - (44 delta) &/or Stock
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ETN (Eaton Corp.--$81.68; +0.76; optionable): Industrial electrical
STATUS: Cup w/handle. Strong rally in January 2018 peaked rather violently and reversed. ETN fell into the current base. Formed an inverted head and shoulders April to early June, broke higher but that failed. Continued in the base then rallied again in July, moving past the interim highs in the pattern. This month ETN, similar to CRUS, formed a four week pennant handle. Put in a higher low at the 20 day EMA inside the triangle. Looks as if ETN is close to a breakout. When it does make the break over the buy point and holds the move on good volume, that is the entry signal. Looking for a move back to the prior highs as the initial target. That move lands a 95%ish gain on the call options.
Volume: 1.066M Avg Volume: 2.317M
BUY POINT: $82.11 Volume=3.2M Target=$89.99 Stop=$79.45
POSITION: ETN JAN 18 2019 82.50 C - (45 delta) &/or Stock
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--by the MarketFN STG Team
JNJ (Johnson & Johnson)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Johnson & Johnson (Ticker: JNJ). We currently like United Rentals, Inc. (Ticker: URI) 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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SM - SM Energy Co. is currently trading at $30.39. The October $30.00 Calls (SM20181020C00030000) are trading at $2.30. That provides a return of about 7% if SM is above $30.00 on expiration Friday in October.
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Success Trading Group: 7 years without a trading loss!
| 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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