Real Life Trading Fall Portfolio 2018: Third Edition
Welcome to 2019 my fellow friends of the fibonacci.
I trust your holiday season was miraculous and splendid! The US markets was in shambles most of December, with some pretty gnarly drops, coupled with really intense volatility.
One of my rules is ‘do not hold many shorts over the Thanksgiving and Christmas holidays.’ Usually in the markets, we will see some rally post Thanksgiving and Christmas, which was certainly the case this year. The S&P500 saw some gorgeous surges; 11/26 into 12/3 and so far from 12/26 until right now.
The other interesting event was how perfectly the SPX bounced off of the 200 SMA on a weekly.
It will be interesting to see how the markets ‘retest’ what appears to be a giant head and shoulders pattern. Keeping in mind this is what 2008 looked like.
And here are some similarities. Very interesting to say the least. Let’s see if we can take advantages of the moves either with day trades, option selling, super quick swing trades and pure volatility plays.
1. Axsome Therapeutics, Inc. Ticker: AXSM Analysis on 1/6/19
So far, nothing too wild and crazy with this stock has occurred. I haven’t personally made one trade on it since I began watching it back in late October.
AXSM hit it’s head against the 100 SMA on a weekly and then traded back down into the support level where it bounced before in the past.
Once again, some great analysis from the last write up. “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. “ It sure seems as the buyers found a fun level they like to buy at. Congrats if you did catch the chance to play that bounce off of support .
AXSM price from the first edition: Down $1.33 (33.5%)
2. Purple Innovation, Inc. Ticker: PRPL Analysis on 1/6/19
In the last write up, I mentioned “From here, kind of best case scenario, here is what I expect on PRPL. “
When PRPL came into the 100 SMA as support on this day, per the above chart I watched it and it never bounced higher or made any good reversal patterns. Therefore, I never played this one either. Pure SOH (sitting on hands) type of approach.
At this point, if there’s going to be any bullishness on PRPL that seems appealing, I’ll wait for this. And if I do play it, I’ll likely end up playing a super conservative stop that’s really far away, which would lead me to be able to increase it and lose less than 1R. Certainly trying to ‘pick the bottom’ on this company, but the trend doesn’t seem that firm. Looks like an uncomfortable situation, which will just cause me to pass out on this stock and trade.
PRPL price from the first edition: Down $.95 (15.4%)
3. NeoGenomics, Inc. Ticker: NEO Analysis on 1/6/19
Some more fun analysis on this one. It’s always good to go back and review ones work and charts. It really can boost your confidence, if that’s ever needed.
“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. “
Per the above chart, NEO did pull into that ‘great buy zone’ of $11.98 area and along with the market it’s been working on bouncing. This one has been tracking the broader markets much more than I thought it would. I was hoping NEO would kind of ‘do its own thing’ and become the chosen one, but it hasn’t happened at least yet.
Regarding a new trade now, as mentioned this is going to copy cat the markets for a while it seems. Therefore, whatever SPY does, NEO will do most likely. Which means, we could all expect a break in either direction very soon. Higher? Sure, makes sense. Lower? Psh… why not.
As mentioned before, day trading will be an exceptional approach to these markets as the volatility and wide daily ranges are here to stay for the foreseeable future.
NEO price from the first edition: Down $3.35 (21.09%)
4. Vocera Communications, Inc. Ticker: VCRA Analysis on 12/10/18
To sum it up nicely, this was the trade setup on VCRA.
Well, it’s UP right now. That’s good.
Now, this will be the fun and educational part of the write up. I get questions all the time about stop movements. And as usual, it’s going to come down to timing. AKA, how long do you want to be in the trade? If you have a longer time horizon and you don’t need to lock in any bill paying money from this trade, you could go with a stop like this.
Otherwise, if you do need to lock in some gains, your stop would be placed like this. Granted, it is in a super obvious location and spot, but the thought process from here is if VCRA really takes out all those recent lower shadows, it will be a few months before we see any significant bullish growth in this stock.
VCRA price from the first edition: Up $4.99 (14.35%)
5. Apple Inc. Ticker: AAPL Analysis on 1/6/19
This was kind of an interesting stat from the recent drop that occurred on AAPL.
$AAPL's 10% drop on Thursday translates AAPL losing the market cap of:
That is intense! What I can say is, it was the perfect culmination of some WONDERFUL bearish trades and put purchases that many Real Life Traders benefited from. The analysis in the last write up was like, uber bearish…
In fact, here it was.
“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."
The low of AAPL on this past Thursday was EXACTLY $142. Which is kind of amazing. My target was $141.88 even though I did bow out of some puts without hitting the target ‘exactly’, I felt as if AAPL being down 10% in one day was just ‘too much’ and people were looking for any excuse to get in bullish.
At this point, I do expect AAPL to eventually reach $126.86. That is an unfilled earnings gap from back in February 2017.
Likely AAPL is about to create a wave 4 structure of some type. A few Real Life Traders also have some $135 and $130 put sales expiring in 2 weeks on AAPL. Kind of perfect timing really. I do expect those to expire worthless, even though I’m really considering just buying them back later next week and selling some $110 Feb or March put sales.
But, don’t be afraid of looking to buy puts or go short on AAPL again as it pulls into the 20 or 50 ema on the daily. At this point, the short term and intermediate trends ARE bearish and AAPL is without question in an interesting correction of sorts. It’s going to be fun to see exactly how this one plays out, but rest assured, we can take advantage of these moves!
AAPL price from the first edition: Down $68.01 (31.1%)
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. January is going to be really exciting because I have my FIRST RLT meet up of the year happening in just 2 weeks.
I would love for you to make it, if you can.
AND, the January challenges are already going strong. I am about to go meet up with some friends, but before I do, since today is the 6th, I am about to knock out 60 pushups! Let’s continue to enrich lives together! Thank you for being apart of Real Life Trading!
Your humble host,
~ Jerremy Alexander Newsome the Italian food eating 8th wonder of the trading world.