Real Life Trading Spring Portfolio 2017: First Edition
Real Life Trading Spring Portfolio 2017: First Edition
Hello beautiful traders, stock market fans, investors, friends, family, fans, and followers from around the world!
As your eyes fall upon this text, I truly hope you are doing magnificent! Itâ€™s a new month (April) and also another season. Spring is upon us, even though our boy Punxsutawney Phil saw his shadow (indicating 6 more weeks of winter). Here in Nashville, TN the weather is quite perfect at the time being.
Every month at Real Life Trading we have a theme, which celebrates the LIFE part of our company. March is (or was depending on when you are reading this) Kids Month. We got together and hosted numerous webinars just for the young adults of the world and I even had the privilege of hosting some in class sessions (via Skype or Google Hangouts) ~ technology sure is wild. Totally different from when I was in school.
Alright, letâ€™s hop into the trading world. Over 2 years ago, a vibrant trader named Pat suggested that I follow certain stocks and keep a portfolio of those stocks and trades each month. Since then, Real Life Traders the world over have enjoyed these specific, intense, seemingly work intensive and yet, somehow still free, reviews.
We will be following the below 5 companies during the season of Spring. Note: These are not specific buy orders. So, donâ€™t just go run to your broker and buy 100 shares on each of the below stocks. Sometimes our analysis is bearish or perhaps Iâ€™m looking to play an option trade, or yes, on some occasion, weâ€™re looking to buy and hold for the 3 month time period. Each stock will have itâ€™s own unique and individual analysis. Feel free to share with your friends or trading buddies and if you have any questions, make sure to ask them in the comments section below or email me at email@example.com and my magical email sparrow will send you a quick reply.
1. Red Hat Incorporated: Ticker RHT ~ Analysis on March 28th, 2017
Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide, with almost 9,000 employees and is headquartered in Raleigh, North Carolina.
RHT does not pay dividends, but it is a fun and volatile stock, especially on earnings, thusly, itâ€™s exceptionally fun to day trade.
Itâ€™s all time high price is…well shoot…below is the weekly chart.
What Iâ€™m seeing right now is actually a break out of a pretty nice distribution phase. For those who would like a refresher on how I blend my gap analysis with my Dow Theory training for longer term trades, click here to watch my video on this subject.
Letâ€™s zoom into the purple box in the above weekly chart and discuss this recent price action and what we as traders can do from here.
So, weâ€™re looking at the last 2 years in a nutshell on RHT. Itâ€™s traded decently sideways in a consolidation / distribution. As of this week (and specifically today) RHT broke out with a nice bullish gap and go. Notice how beautifully the old resistance at $60.87 from back in March, August, and November 2014 acted as new support in February 2016, giving us a great buying candle.
There are a ton of notes in the below daily chart on RHT.
A shorter term trade (one spanning 2-3 months) on RHT would look something like this.
A longer term trade (one spanning 1-2 years) could be set up like this on RHT.
A potential non directional option trade on RHT could be a put sale, which is a bullish strategy. (Iâ€™ve got a video on that also). Click here for my free video on the put sale strategy. Thereâ€™s no real premium unfortunately for a bull put spread right now on RHT. Or, at least in the location I want it [below $80.]
Either way, whichever strategy you choose to approach RHT with in the upcoming months or years, I would be eyeing it bullish for sure!
2. Snap Incorporated: Ticker SNAP ~ Analysis on March 28th, 2017
Thereâ€™s no way I could leave out this gem! SNAP just had an IPO. Before it hit the NYSE, here were my thoughts on it.
I still have a wager open on SNAP. The Spring portfolio will be over before the expiration date for the wager, meaning, I think we all get to find out together in the upcoming weeks if I win the Snap Chat bet or not.
I think this image will make you giggle a little bit on SNAP.
Is SNAP over valued? Yes. Horrifically. Will it go lower. Most likely, yes. But a quote you should always carry around in your fanny pack, â€œthe markets can remain exuberant much longer than you can remain solventâ€ meaning, if SNAP keeps crushing higher highs and breaking out of resistance, stop buying puts and losing money…
Therefore, my set up on SNAP will be pretty basic. Most will call this a bracket trade.
Bam. That simple. Iâ€™m okay with SNAP going up or down. Iâ€™ll likely trade the options on this beast in the preferred direction. Letâ€™s wait and see!
3. 3-D Systems Corporation: Ticker DDD ~ Analysis on March 28th, 2017
Do you remember about 3 years ago when everyone and their mom we talking about 3D modeling and printing? I mean, itâ€™s still going on in an intense way, itâ€™s just totally behind the scenes right now. The all time high up there on DDD was 95.28 and thatâ€™s exactly when you would turn on the T.V. and you would hear a story about an item or product that was just created using a 3D printer.
I still think itâ€™s an incredible industry and sector and by no means is it dead in the water. I fully expect DDD and other companies in this sector to make another rebound in the future (say 5-10 years down the road). What has to happen for that to occur in my opinion, is the sector has to become relevant in the eyes of a consumer, rather than just to huge manufacturers.
Consumers are buying them, but not massively. What makes the iPod more hip than the 3D printer? Well, a lot of things. Mobility for one and of course utility. What will a consumer actually create with a 3D printer? A misshapen cat figurine? A plastic ring? Other random trinkets?
Donâ€™t get me wrong, conceptually itâ€™s mind blowing. But itâ€™s going to take an innovator, artist, or entrepreneur of some kind to really main stream these systems into something everyone â€˜needsâ€™.
This guysâ€™ YouTube Channel is pretty cool if youâ€™re interested in actually owning a 3D printer.
What will the stock do?
Well, youâ€™ll notice the â€˜bubbleâ€™ and euphoria that took place on DDD back in 2014. Thatâ€™s obvious. It has now returned to the confines of normalcy and is chilling in this $9 - $17 range. Note, this is still a massive range with plenty of opportunities to make money!
You might notice the above triangle Iâ€™ve drawn on DDD as itâ€™s in this accumulation phase. Personally, I do still expect DDD to continue itâ€™s consolidation in this â€˜buy low, sell highâ€™ area for a while. Years even. But, with the right approach and strategy, we might be able to pay some bills with this guy.
This is still on the weekly chart and the blue line represents the 100 simple moving average. It has worked as a great resistance on DDD back in the past, specifically in October of 2016. Annnnndddd, now itâ€™s back. Therefore, if DDD closes below $13.62 Iâ€™ll anticipate DDD trading back into the $10 territory.
However, if DDD continues trading sideways, selling puts (like my buddy George), iron condors, other various credit spreads, or long term share ownership and covered calls could likely be the best approach.
Bottom line, it looks pretty â€˜channelishâ€™ to me. At least on the daily chart. Therefore, buy low, sell high, and play the direction (which is sideways).
Whew. This portfolio is getting a little tech heavy. Letâ€™s go find some non tech stock.
4. JetBlue Airways: Ticker JBLU ~ Analysis on March 28th, 2017
Weâ€™ve focused on other airlines in past portfolios. DAL, AAL, LUV, HA. Letâ€™s keep an eye on JBLU for Spring. I have yet to fly a JBLU flight, but Iâ€™m sure thereâ€™s one waiting for me around the corner. Maybe Cabo?
To give you some past perspective, here was my analysis on JBLU at the start of 2017.
So far…pretty scary.
I do feel JBLU, along with the other airlines, is setting up for a good â€˜buy low, sell highâ€™ type of play. Right now, JBLU is stuck in between the 100/200 SMA on the daily chart.
My good buddy Charles W. has been in some shares for a couple of months and completed his first successful covered callon JBLU just weeks back. At this point, it seems simply that if JBLU closes above $20.84 and breaks out of those long term averages, letâ€™s just stick with our analysis. She looks bullish to me.
As far as approach goes, I know Stan J. has completed a few successful put sales on JBLU. It pays pretty decent premium. One could sell the May $18.00 put sale for .25 per contract. Otherwise, the options on JBLU donâ€™t move amazingly well, nor does JBLU pay dividends. But, itâ€™s not a super expensive stock. Itâ€™s less expensive than LUV, DAL, AAL, HA, ALK and SAVE. Meaning, if youâ€™re looking for a deal on a flight, this could certainly be one.
5. APPLE Incorporated: Ticker AAPL ~ Analysis on March 28th, 2017
Yep, weâ€™re here on AAPL. My favorite stock to trade. I put it in every portfolio write up we watch together. Why? Itâ€™s the biggest company in the world…why not?
The analysis on AAPL is fairly simple right now. Be bullish, buy the dips. The trend is your friend on AAPL. The hardest thing to figure out is probably going to be â€˜where does it stop?â€™ My target is $150, but I think that price will be a breeze. Hereâ€™s exactly what I was thinking on AAPL back in January.
I did make a pretty outrageous bet with my buddy Justin Linderman that AAPL would hit $150 before September 2017. I made that back in…October 2016 I believe? Thatâ€™s what the pink line represents on my chart.
Hereâ€™s the deal my friends, donâ€™t try anything creative on AAPL, like a bear call spread or iron condor. Just look to play it bullish when AAPL pulls back into a moving average on the daily, 4 hour or hourly chart.
I truly appreciate you taking the time to read this whole thing!! And of course, I hope you found it enriching, helpful, and hopefully profitable!
The next one will be in about one month from now. Iâ€™ll see ya then! If you have any questions, concerns, thoughts, comments, opposing views, or additional ideas, feel free to email me OR post them in the comment field below.
Until next time, remember, Love life, live life, and trade it!
Jerremy Alexander Newsome
CEO and only guy would who dye his hair bleach blonde because of a stock bet; at Real Life Trading