Real Life Trading Fall Portfolio 2018: Second Edition
It apparently is supposed to be 7 degrees in Nashville, TN just a few days hence. And it isn’t even winter yet.
NFL football is winding down and I’ve been knocked out in all my Fantasy Football leagues. Ashley and I also had the privilege of moving into a new home these past few weeks and we have already hosted a few Real Life Traders as 2019 draws near.
The markets are certainly giving many a spook as volatility is running wild, supports are being broken, volume is coming in and fear is starting to spike. As many thought (including myself) we would have a much more bullish November and December, it seems the markets are scaring investors and exciting the day traders as daily moves begin to increase in size.
Time will certainly tell what the broader markets do. My guess is still the S&P500 makes its way down into the 2560 area eventually, as some lower shadows get thrown in, bulls get really scared and then a bounce in early 2019 shows up. Of course, I could be wrong. The good news is if the markets do not bounce off of that 2550 price range, we will have a clear distribution phase breakdown which could lead to some fast selling and numerous opportunities for those who know how to hedge, short and capitalize on any downside movement we get.
Until the S&P500 makes a new low (lower than 2530), I’ll continue the thesis that the markets are still making higher highs and higher lows, which is true until that happens, if it does. Let’s all have some fun either way! This is our time as traders to inform as many people as possible, just incase there is some wicked selling, so they can be prepared. Between now and then, let’s find out what these gems might do.
Axsome Therapeutics, Inc. Ticker: AXSM Analysis on 12/10/18
As we expected from the first write up, this stock which is chilling in the accumulation phase, is doing just that. Hanging out and accumulating. AKA ~ trading real sideways and throwing in ridiculous choppiness.
I also mentioned in the first write up that the 100 SMA on a weekly would be a big ordeal and a strong resistance. Well, boom. It’s amazing how well that works. Until AXSM can break through and close above that resistance, it’s likely that she will continue hanging out in the sub $5 range, attracting only the purest of speculators.
Although this company is poised for good growth, it seems clear the $2.44 price will be tested once again and only time will tell if AXSM will break through that support and print lower lows or if buyers will come in to prop it up. Either way, myself and others will be keeping our eyes on this one for sure.
AXSM price from the first edition: Down $1.00 (25%)
2. Purple Innovation, Inc. Ticker: PRPL Analysis on 12/1018
This stock hasn’t produced as much green as I thought it would. At least not yet. Similar to ASXM, the 100 SMA on a weekly will likely act as a nice resistance. However, it is still pretty far away.
The moving average that caused the small hangup for the bulls was the 200 SMA on a daily.
But that did occur after earnings on PRPL, which really terrible. One of those ‘we are still losing money as a company, just not as much money’ situations. This was the candle pattern that helped the bullish move.
From here, kind of best case scenario, here is what I expect on PRPL.
PRPL price from the first edition: Up $.48 (7.8%)
3. NeoGenomics, Inc. Ticker: NEO Analysis on 12/10/18
Wow. This stock really moved nicely after the very first write up on this one back on 10/27/18. The good news is, the aforementioned put sale on NEO, expired worthless back on 11/16/18, which is about the only positive so far for this stock.
And then just a few days later, NEO posted a very small and dainty double top. It seems those partnering patterns and sentiment has caused NEO to pull back even more, possibly causing an even larger double top to form.
This time, it’s on a weekly chart! Wow town. Since April 2018 this is the first time for NEO to close below the 20 ema on a weekly. Therefore, keep watch for NEO to possibly retest some and trade lower into the 50 ema on a weekly. It appears NEO is going to have a tad more weakness for the next few days or weeks, however, it still seems a great buy if she pulls back into that $12 region once more.
NEO price from the first edition: Down $1.69 (10.64%)
4. Vocera Communications, Inc. Ticker: VCRA Analysis on 12/10/18
Hey, the one winner of the group! I mean, sure, PRPL is up some, but this stock was actually causing higher almost every day since the previous write up. Their earnings were good and we saw a perfect retest of the retest gap.
I mean, how do we play a stock like this as she's around all time highs? As wild as it seems, this bounce off of the 10 ema on the daily wouldn’t be too crazy.
What I would like to see far more is a nice larger pull back a tad past the 20 ema on the daily. Similar to the 11/20 and 11/21 candles. Will it bounce? I do not know. But I do know that right now, this trend is bullish and we should be friends with trends.
VCRA price from the first edition: Up $5.00 (14.38%)
5. Apple Inc. Ticker: AAPL Analysis on 12/10/18
Now this is going to be a fun write up and story to tell to future generations. The time AAPL lost its #1 market capitalization spot to MSFT. What an incredible story for these two tech giants to still be battling it out for the number one spot after so long.
As I write (about 12:49 am Eastern on Monday morning), AAPL has a market cap of 799.552 Billion. AMZN, only a poultry 796.594 Billion, but your boy MSFT with an impressive 804.757 Billion, putting it in the top spot for now.
Does this show that tech is dead? No. Does this show that the sectors and these behemoths are finally putting in a rest and a much needed and deserved pull back? Yes.
Honestly, my last write up on AAPL was so good and spot on, it made me smile. What great insight and even foresight into the markets. Let’s bring back the text.
“The biggest update on AAPL probably would be this decently interesting head and shoulders type of pattern. I agree. It’s there. Which means, what will earnings bring? My guess on earnings, they will make billions, crush gains hard and probably not gap that much. If AAPL gaps down similar to AMZN and GOOGL it could get pretty gnarly in the markets. The 100 SMA on AAPL will be pretty key on AAPL. If she gaps down below that price, AAPL (and the markets) will flush lower decently hard. As long as AAPL stays above that price on an earnings gap, I would assume the trend will stay in tact.”
Well my friends, guess what? The exact thing that would cause the markets to ‘flush lower decently hard’ is what happened. AAPL did get below that 100 SMA on earnings. And did so in style!
If AAPL goes lower (which seems to be the case) the markets will certainly head in that direction as well.
When is the last time AAPL did something like this? Bad news. Recently. Only 3 years ago, which I remember vividly. Check out this chart.
From the high on the day before earnings on July 21st, 2017 to the opening price on August 24th, 2015 AAPL dropped around 30%.
As I type this, AAPL has dropped 24%. Which means we shouldn’t have too much lower to go, but lower is certainly a possibility. The other concerning issue? AAPL closed below last weeks bullish high wave candle and closed below the 100 SMA on a weekly. The only 3 other times this has occurred in the last decade was 2015, 2013 and 2008.
How much worse will it get? I’m honestly not sure. But I would say, AAPL does have room to drop. If you have shares, which many of us Real Life Traders do, have some form of protection. Likely the 160 January and 140 February puts will be quite helpful.
The short term and intermediate trends are bearish on AAPL right now. And that will be my prognosis until AAPL hits the 200 SMA on a weekly (which is $141.31 mind you) or we close above $185 and take out the bearish candle from last week.
We saw the warning signs together from the last write up and they are still present in this one. I tried to take AAPL bullish this past Friday with no avail. And since AAPL did close below $170, which was a huge support, it seems the bears have won for now. [Similar to how the Bears won at home in tremendous fashion agains the Rams this past Sunday night. Congrats bears fans!].
AAPL price from the first edition: Down $47.81 (22.1%)
Team, thank you for reading. I hope this was helpful, enriching and enlightening! Reach out if you have any questions. Email me anytime or post in the comments section below. YOU ROCK!
~Jerremy Alexander Newsome
~ Your humble host and still awful executioner of fantasy football, Jerremy Alexander Newsome