Market Summary (continued)
Friday the market did not give us the perfect setup; as noted Thursday, it often does not. That does not mean it was a bad session. Hardly. The indices rallied nicely.
What we wanted, however, was another pause following Thursday's sluggish session, a pause to better setup a new move higher in the coming week to continue the move with a new breakout.
Stocks did start lower pre-market and by the open improved but were still mixed and near the flat line. The problem was the Fed was active again. Wednesday Powell confirmed the Fed-speak of the Fed vice chair Clarinda, i.e. that the FFR was just below neutral. Friday the New York Fed reiterated the FFR was not far from neutral and indeed the FFR was to remain 'low.' Okay, the top three on the Fed all agreeing rates were near neutral, meaning quite limited upside in terms of more rate hikes. Ultra-ultra Fed dove Kashkari also threw in that the Fed should not hike rates when job creation is strong and inflation tame. What more could you want?
How about the administration suggesting a US/China trade deal Saturday was a done deal. Mr. Lighthizer, a White House advisor who has been very negative about the possibility of a deal, stated he would be 'surprised' if the Trump/Xi dinner was not a success. Okay, so even the negative folks were pushing for a deal.
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DATA (Tableau Software, Inc.)
We saw the major indices setting up a potential double bottom late November as they tested the October lows with rising MACD.Â Some stocks such as DATA had already tested and started to bounce.Â DATA gapped lower on 11/20, coming near the 200 day SMA and reversing intraday.Â It rallied to the 50 day EMA to close that week and we put it on the report to play an overall market rebound off the October low test.
The following Monday DATA gapped upside, tested the gap, then started back up.Â We used that to enter the play, buying some January $115 strike call options for $6.40.Â DATA held its gain Tuesday, then Wednesday gapped upside and rallying.Â Thursday upside again, nearing the early November highs and our initial target.Â Friday DATA rallied again, moving to our target.Â It then started to stall.
That was our cue to take some gain.Â We sold 2/3 of our position for $12.90, banking a nice 100+% gain on the calls.Â Now we see if it can continue higher or if the prior high was the top of this bounce.Â If the former, we let the last part of the position work.Â If the latter, we take the rest of a solid gain in a nice, fast bounce.
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| 2) STOCK SPLIT REPORT |
Here's a leader play and our current analysis.
STATUS: Double bottom. ARWR gapped higher in early September on earnings, tested, but it was not a good time. In early October ARWR dropped hard in the market selling to near the 200 day SMA. Bounced starting late October into November then tested back mid-month, again coming to the 200 day SMA. Last week ARWR jumped Wednesday, then tested Thursday to Friday, holding the 50 day MA it just broke. Note MACD was higher at the second low, showing momentum turning as seen in so many stocks. We are watching for a new break higher with good volume as our entry point. Earnings are 12/11, but ARWR has performed well on its results.
Volume: 1.083M Avg Volume: 1.756M
BUY POINT: $14.88 Volume=2.4M Target=$17.50 Stop=$14.01
POSITION: ARWR JAN 18 2018 15.00 C - (55 delta) &/or Stock
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ILMN (Illumina--$337.50; -0.45; optionable): Biotech
STATUS: Double bottom. Nice solid rally to late September. Long run, needed a break, taking it. Fell into October, making the 200 day SMA late month. Rebounded into November then faded back to the 200 day SMA two weeks back. Nice doji test and rebound intraday on the reversal session. Through Thursday ILMN rallied up through the 50 day MA's to near the early November 'hump' in the double bottom. Paused Friday with a doji, and would not be surprised to see it pause another session or two. After that when it breaks higher, we want to move in for a rally to near the prior high. That move lands an 80%ish gain on the call options.
Volume: 1.213M Avg Volume: 1.232M
BUY POINT: $338.88 Volume=1.6M Target=$370.44 Stop=$328.55
POSITION: ILMN JAN 18 2019 340.00 C - (52 delta)
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--by the MarketFN STG Team
HSY (The Hershey Company)
Our Success Trading Group members will be looking to enter new positions next week. We have many stocks on our radar including The Hershey Company (Ticker: HSY) and NewJersey Resources Corp. (Ticker: NJR).
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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VIRT - Virtu Financial, Inc. is currently trading at $25.17. The January $25.00 Calls (VIRT20190119C00025000) are trading at $1.35. That provides a return of about 5% if VIRT is above $25.00 on expiration Friday in January.
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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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