Fall Portfolio 2015 Third Edition
Fall Portfolio 2015 Third Edition
Real Life Traders from all over the world, how are you? I trust you are enjoying this splendid holiday season with terms of endearment, merriment and love being shared by all. Today is the first day of winter. Keep your eyes out for the Winter Portfolio soon, with a list of new stocks that we will track and hopefully make some money on. 2015 was a wild year indeed.
As I write this (which is 12/22/15 at 4:30 pm) Real Life Trading locked in approximately 190.22% for our Day Trades in 2015. (We began tracking in February).
Since this article and portfolio is more geared to the swing trades, let's talk about those results.
Credit Spreads netted in approximately 375% as a total ROI.
Swing Trades (which we began tracking in July) finished right at 45.47%.
Now, just for perspective, I'm not saying I took one huge account and grew it almost 600% I spread my accounts out for their respective purposes. It is much easier to grow smaller accounts and I'm sure the numbers would have been magically different had I been trading $100,000,000 in 2015, but needless to say, I would have demolished the SPY annual return of 2015, which is approximately 0%.
Here were my 2015 projections and ideas from the beginning of the year. https://www.tradingview.com/chart/DOWI/mXiOq7wU-20...We can see those protective puts would have really come in handy. When the Dow broke the $17,000 level, the chart really became 'damaged and boringâ€. Likely we will continue a distribution phase for the majority of 2016 until at some point we break in one direction or another. I'm still leaning towards the bullish break.
Let's chat specific stocks.
#1 AAPL - Analysis on 12/22/15
AAPL overall really has tracked pretty closely to the market, in the grand scheme of things. Back in Jan 2015 AAPL was around the $106 price range. That's exactly where we find it again. In my opinion this is a solid buy low location on AAPL. We have great R:R potential and some very strong support on the weekly chart. The 100 SMA is at $107.20 on the weekly chart, which is providing some buying pressure, along with the $106 support level. The interesting point to note for sure is, if AAPL breaks the $105 level it has some room to run bearish!
I specifically care about AAPL staying above $105. As it stands, I made a wager a few weeks back that if AAPL breached $105 before its next earnings announcement (1/26/16) that I would eat an apple covered in mustard. And I hate mustard. It's gotten close. VERY close. Therefore, my bearish analysis is as follows.
If AAPL closes below $105, I am bearish. Stop at $110. Target 1 $95. Target 2 $92.
As a note, many of those trading AAPL who have been dabbling in the non-directional strategies have all been doing very well. AAPL has really been just trading sideways.
On the bullish flip side, if AAPL closes above $110, one could place a stop at $105. Target 1 would be $130. Target 2 would be $132.
I also currently have a $105/$100 , $125/$130 Iron Condor. I will only be concerned on this Condor if AAPL closes below $105, at which point I will unravel by buying to close the $105 Jan short put and holding onto the $100 Jan long put. I might also BTC my bear call spread and sell one even closer, like a $110/$115. This is just a plan for now, but certainly keep your eyes on AAPL at this level. A bounce could be a spectacular move!
AAPL price from the first article: Down $2.29 [2.09%]
#2 UAL - Analysis on 12/21//15
At this point UAL too, is quite sideways. I'm already beginning to sense a theme here. It has been pretty flat since our first analysis on it back in October. Granted, it did bounce nicely off of the $51 support like we planned, but since then not much has been happening. If you are still in that original trade, you might remember from the 2nd portfolio '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 gin'. Well, the December covered call did expire worthless.
Therefore, if you are a shareholder of UAL you could consider selling the January 22nd expiration $63.50 covered call once more, bringing in at least $0.40 more cents. One could also move up the stop to $55 to lock in some profits.
Other than that set up, UAL is a great candidate for an iron condor or other option selling strategy if you can find any premium in one. Earnings are January 28th. Let's make sure it expires before then. The $51.50 put sale doesn't look bad at all. Bringing in $0.48 cents at market. That is a nice support, the same one we bought off of last time. Owning shares down there wouldn't be a very scary thing.
UAL price from the first article: Up $5.74 [10.98%]
#3 INTC - Analysis on 12/22/15
This tech giant has recently been battling a behemoth of a resistance at $34.70. This proved to be an exceptional place to sell on 10/23/15 after the rally from earnings.
At this point, I am slightly bearish on INTC. You might notice, the purple-ish trend line. Well, that angle broke down and now INTC is retesting it with declining volume. Plus, back in Jan of 2015 there was a strong gap on INTC; another reason for all the selling pressure. If you have shares on INTC this could be a stellar area to get into a collar, or just a covered call perhaps. Bring in some premium as it trades sideways.
I don't have a specific set up, other than stipulating if INTC came back down to the $30 area it appears to be a good location to buy again.
Both put sales for Oct and Nov expired on INTC. There's very little premium down at $30 right now for Jan. Therefore, INTC has been moved to the 'wait and see' category right now; nothing screams exceptional to me.
INTC price from the first article: Up 2.12 [6.51%]
#4 HOG - Analysis on 12/22/15
HOG keeps motoring lower and is down even farther after earnings. Last month our outlook was bearish, too. At this point, since the earnings gap, expect HOG to keep heading down a tad lower. Below is a weekly chart. Next target/support I would anticipate this stock reaching would be $41.46
The next chart is the daily image with the 10, 20 and 50 Exponential Moving Averages.
Since the trend is bearish, no reason to fight it for right now. Feel free to short the pullbacks into the EMAs, preferably the 20 or 50. I wouldn't look for a bounce on this one, at least not yet. It appears HOG might have 10% lower to go before hitting the brakes.
HOG price from the first article: Down $9.6 [17.42%]
#5 LLY - Analysis on 12/22/15
This stock has been su premely fun to swing trade and/or day trade. A lot of volatility and movement recently.
On my very first article on LLY my analysis was 'If LLY pulls back down to the $78 price range I would look to go long. This could occur quickly on an earnings gap potentiallyâ€. We have had two occasions to buy off of the $78 area and the 200 SMA on the daily chart respectively.
Now it appears LLY is back at it's resistance price in the $87.25 zone. There's likely going to be some selling here. Similar to INTC, it's at a resistance and one could implement a collar or covered call if they owned shares; likely a $90 Jan CC. At this point, it's safe to say that Miss Lilly is in a channel. Therefore, if LLY pulls back down to $78, well, it worked four other times, we could try it 'one mo gin'.
The bid/ask spread appears to be pretty wide on LLY for Jan 22nd options. Earnings seem to be on Jan 28th. Therefore, you could consider some non-directional option strategies if you find the right amount of premium. I can sense some pressure building on LLY too. If LLY has good earnings and breaks out of this distribution phase, this pharm company could really run. Feel free to continue to keep an eye on it.
LLY PRICE FROM THE FIRST ARTICLE: Up $1.49 [1.7%]
Remember, these portfolios or 'stock analysis' that I've been doing aren't specifically just BUY THESE STOCKS, but they're more of 'I'm following these stocks pretty much daily for this quarter and season.â€ Even though the Summer Portfolio ended with a net loss of .32% - that's just the change in the value of these five stocks cumulatively. Who knows the exact percentages from the other trades harnessed through this analysis. I love the leverage options provide us in boring and sideways markets like these. December was a very profitable month thanks to option selling strategies.
The real point is, any one of us can like any stock, trade, or company. As long as each Real Life Trader makes risk mitigation their main objective, creates a plan around that and follows through, it will all work out in the end.
Today is the first day of winter! I am so pumped and ready for 2016. This is going to be our best year yet! I hope to continue our mission of Enriching Lives with you through many more years. If you ever have any questions about trading, potentially your specific trades and analysis, remember I am always here to help! Until next time,
Love life, live life and trade it!
Jerremy Alexander Newsome