Fall Portfolio 2015 Second Edition
Fall Portfolio 2015 Second Edition
Real Life Traders, Hello, Hola and Howdy! How are you? Have you noticed people using the term 'real life' more frequently to simply indicate something is actually real, concrete and legitimate? There's even a song about it, if you like country, that is. I'm not specifically saying I like that song, but it does make me smile. Catchy name for a company if you ask me…
I am really excited about this upcoming holiday season and Santa Rally that I believe the market might have. Here are three videos outlining my thoughts on more of the macro scale:
Energy Wednesday on 11 11 2015 (The Afternoon Swing Trading Room)Anyway, let's chat about some individual equities, specifically the ones we are spotlighting for this Fall Portfolio.
#1 AAPL - Analysis on 11/12/15
Our love, our vixen, our muse, our moneymaker. Dearest Miss AAPL (AAPL is a woman stock in my eye), would you please tell me where you are thinking of going? AAPL has been a little topsy-turvy these recent months.
Earnings has come out, AAPL just absolutely obliterated most numbers, and yet is still being held down by some of that strong weekly resistance I pointed out in our last article. These two trades I mentioned last time were 'A $106 or lower put sale that expires before earnings, or an iron condor that expires before earningsâ€. Both would have expired worthless. I know a few other traders who had some other various put sales on AAPL which all expired.
Another Real Life Trader, Brian B, sold the $128 November covered call, which appears it will expire just fine and he will be able to do another one. I attempted a bullish swing on AAPL https://www.tradingview.com/chart/AAPL/eCGqEb9Q-AAPL-swing/ and that didn't quite work out. Small loss; kept my house though, that's good!
So, what now on AAPL?
That's a great question, Riddler.
I do know Ray R and Brian S have some $116 put sales on AAPL. My thought is bracket trade at this point. Tonight, as I write this, AAPL had a small high wave spinning top candle on Wednesday, 11/11/2015. Today was a perfect inside day candle. Therefore, if AAPL breaks out I would call for a move in the direction of the break out - a high probability. Thus, the bracket trade. In the above videos I outlined the 'buy the November Dipâ€ strategy as I do anticipate some slight selling in the market the next few weeks. If AAPL participates I would look to pick some up again, in a nice buy low / sell high fashion. $108.83 and / or $105.90 would be the locations I would like to buy shares during an AAPL pull back. Great risk:reward here as I see AAPL likely getting back up into the $130's in months to come.
If you have shares long term, consider some Dec week 1 or week 2 protective puts if AAPL does decide to pull back.
AAPL price from the first article: Up $6.26 [5.71%]
#2 UAL - Analysis on 11/12/15
I believe low energy costs have helped out UAL inch up a bit higher since the last time we peered at it. Two bullish retests gaps (one from 10/8 - 10/9 and 10/22 - 10/23 on earnings) have caused UAL to get closer to our target of $63.53. Per our last analysis: 'Therefore, UAL is a buy for me above $52.58 with a stop at $48.73. That's a $3.85 risk. If a trader had a $1,000 Risk unit - 1000/3.85 = 259 shares.â€ If you did get the opportunity to hop into this trade one could increase the stop up to $53.84 to lock in some profit. From there, since traders might have more than 100 shares, a December $63.50 covered call is bringing in at least $0.65 per share. Since a trader with a $1,000 R would have 259 shares, we could sell two covered calls, bringing in an extra $130.00. If UAL closes below $63.50 before the third Friday of December, we might be able to do this 'one mo ginâ€.
I do not really have any other trade set up at this time. One could also consider a collar at this point if you really want to be in UAL long term. I am anticipating we will hold through a slight pull back anyway and then hopefully UAL will bounce again.
UAL price from the first article: Up $6.99 [13.37%]
#3 INTC - Analysis on 11/12/15
This Tech Giant had a giant move these last few weeks. My last analysis and set up on INTC was ' One could have a limit buy at $30.55 just to see if it fills.â€ INTC got very close on earnings, with a low of $30.85. I attempted to put in a limit buy of $31 that day, but was just too slow. Instead of missing that move, I elected to go with the put sale. https://www.tradingview.com/x/UAkxfwyI/ Stan J and a few others were able to follow along in that one.
INTC did reach its strong resistance from the previous peaks back in May, March and Feb of 2014. Note it's pulling back some from those highs. The put sale is still open but with only one week left, I'm feeling pretty good that it will head to options heaven.
The only other trade I could consider at this time would be buying this dip. With a limit buy at $31.40 and a stop at $30.52, hoping INTC bounces off the 200 SMA and doesn't take out the strong low formed from the earnings candle on 10/14/15. I like this wave rotation and I can pretty easily count a 1,2,3,4,5,A,B,C structure with INTC currently being in C.
INTC price from the first article: Down .12 [.36%]
#4 HOG - Analysis on 11/12/15
Apparently, Harley Davidson took a ride on the wild side with this recent bearish gap on earnings. The 10/16, 10/19 and 10/20 candles on HOG were all pretty bullish. Therefore, when HOG gapped down on earnings and opened below the strong pivot/support at $52.28, it trapped all of the buyers. If you did do the $50 put sale on HOG expiring in November, there's a chance you'll get put the stock. You still have one week left and anything is possible, but if/when you did get put the stock you could consider selling a $52.50 covered call for December and buying some protective puts.
Here's the current analysis I have for HOG.
Based on the strong gap, volume, breaking support, bearish exponential moving averages, I'm feeling a touch more bearish at this point on HOG, plus it shows a slight double top on this pull back. Between today (11/12/15 and yesterday) HOG had a bearish retest gap. I'm assuming HOG could retest slightly tomorrow. Therefore one could place a limit sell at $48.56 with a stop at $50.28. With a $300 R that's shorting 174 shares (or two contracts). Ultimate target would be $44.01. That specific trade could take two to three months for sure.
HOG price from the first article: Down $5.87 [10.65%]
#5 LLY - Analysis on 11/12/15
Alright, I am pretty excited about LLY and the gap it had on earnings. The gap on earnings was pretty tiny, but on 10/12 (a few days after my first article) LLY had some lower guidance come out that kind of trumped the earnings report. That gap specifically was pretty bearish, but did allow the stock to pull into some good support around $78, the one I mentioned in the last article. The Nov put sale at $70 will likely expire worthless and I do know two to three traders who were able to get into that same put sale after the earnings gap, for a cool $0.48 cents.
LLY has been bouncing nicely off of the 200 SMA on the daily chart recently. I am thinking it could do that again, but slightly anticipating (due to the bearishness of that gap) selling to make a relative low around $76. That's where I would look to buy with a stop around $74.91.
LLY really could pause here and begin to trade sideways. If that's the case, I'll likely consider intently some more $70 put sales, perhaps for December or January. LLY appears to be in a strong distribution phase, but on a weekly chart really seems to respect the 100 SMA, which is near $70 and a great place to pick up some long term LLY shares in my opinion.
LLY PRICE FROM THE FIRST ARTICLE: DOWN $3.91 [4.66%]
Let's see what presents this market gives us for the next few weeks. I am excited to have two Thanksgiving feasts this year. One at my buddy's house and one down in good 'ol Georgia with the family. I'm starting my house hunting, too! Ready to find a place to live here in the Nashville, TN area and potentially rent the place out we're currently residing in. The future is bright, my friends! Keep working towards growth and enrichment of those around you!
I cherish you all! Until next time, remember, Love life, Live life and Trade it!