Real Life Trading Spring Portfolio 2017: Second Edition
Real Life Trading Spring Portfolio 2017: Second Edition
Oh my goodness, has it truly been an entire month since our last article? Well, it has indeed! Our first edition went live into the world on the 28th of March. Since then, all kinds of events have transpired. April was Surprise Yourself Month with the objective and challenge to do something youâ€™ve never done before. One of our traders took us up on this challenge in a big way. Fred A. [12:14 PM] 4/1/17 â€œHereâ€™s a surprise from us for April... shopping to build a home in Costa Rica. About to book the trip down there. Never been there.â€ My good friend Justin L. has completed his first book in the month of April and we had a few other traders join us in the challenge as they gave us an intro for a stock review. Dean, Pat, Sam, Justin, and Jesse were a few who participated in that. April was really the start of earnings season and ended up becoming a really nice win for many Real Life Traders. I tallied up 15.79 R in total, but that was a mere play thing to traders like Blake A. and Matt D. (all part of #TeamNashville) who scored over 30R total. Whatâ€™s the May challenge you might ask? May marks Health and Wellness month at Real Life Trading. The challenge? Follow a workout plan and diet plan step by step. Of course, feel free to consult a health professional or doctor if you decide to engage in anything super rigorous. I might use this month to kick off some triathlon training as Iâ€™ve never done one and this seems like a good time to make it happen. Here is the video for your 2017 RLT May Challenge. Flawless! Now, letâ€™s chat markets, shall we? As a reminder, we are following up on the 5 companies below that I chose for the Spring Portfolio. There will be one more edition to come out at the end of May. The third and final Spring edition and then, Summer is here! Read all of the analysis closely and seriously. The analysis might be 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 firstname.lastname@example.org and my magical email sparrow will send you a quick reply. Red Hat Incorporated: Ticker RHT ~ Analysis on May 2nd, 2017
RHT price from the first article: Up $.83 [.9%]
The analysis on RHT worked out pretty simply actually. The shorter term hourly play from our last analysis did not work (as expected). However, we discussed the $77.50 put sale for May. That looks worry free at this point, along with anything longer term you might have used on RHT.
RHT isnâ€™t running for the moon on any account (at least not yet) but it appears to have a nice slow grind higher, which works for any longer term approach.
We might notice just days after our analysis, RHT retested the old resistance, new support, as we figured it would.
The trade and chart above worked out like a dream.
From here, the chart below pretty much represents the type of wave rotation and movement I would except on RHT. I donâ€™t specifically have a new trade set up, other than, RHT still looks good for the long. If you want to keep your eyes on a potential pull back 3-4 weeks from now around $86.12, that could be a nice price to buy the longer term retest of this break out. But from here, direction certainly doesnâ€™t look bearish.
2. Snap Incorporated: Ticker SNAP ~ Analysis on May 2nd, 2017
SNAP price from the first article: Up $.68 [2.9%]
Oh my. Good â€˜ol Snapchat…what the heck are you doing? I sent my first message on snapchat about 2 weeks ago. Haha. I found out my 13 year old nephew and 12 year old niece use it for messaging and sending funny photos, thus I figured, why not?
Other than that, I still do not see a massive use or need for Snapchat. I have seen some ads on Snapchat, but the ad was very easy to skip and the ad didnâ€™t relate to me at all. Iâ€™ll start seeing Snap as a viable marketing tool if/when I buy something from an ad that I see or I feel compelled to spend some marketing dollars for some wild reason on the platform.
Either way, SNAP is down from when I analyzed it. Thatâ€™s really what I want. You might have been able to make enough coinage to snag a few sandwiches from the bearish move I set in the last review.
Earnings on SNAP is right around the corner and they are quite anticipated. Many Real Life Traders have the $20 May put which we plan to hold over earnings. Most bought it around $1.30. Right now it costs around .70. My thoughts, unless SNAP gaps down on earnings, Iâ€™ll lose my wager and 1R on that trade.
The scary notion is â€˜everyoneâ€™ thinks SNAP will gap down on earnings. And usually what â€˜everyoneâ€™ thinks in the market, the market does the exact opposite.
SNAP will gap on earnings, of that Iâ€™m sure. If it gaps up on earnings and opens above $24.40, this beast will FLY. Iâ€™m talking double digits percentage gains in days likely.
For the bears to take over, SNAP needs to really open below $19. Thatâ€™s what the red and green box represents. According to ThinkorSwim, earnings are on May 10th. If SNAP doesnâ€™t really gap much on earnings (also possible, but not likely) it will appear to be forming a nice triangle, which means it could break out in either direction. If no gap or solid direction comes in on SNAP from earnings, Iâ€™ll change my tune at least for a few weeks to more neutral than the grizzly bear I am at present on this social media company, which I find way overvalued.
3. 3-D Systems Corporation: Ticker DDD ~ Analysis on May 2nd, 2017
DDD price from the first article: Up $1.93 [13.4%]
3-D systems, the synonyms word for â€˜not doing too much since Feb 2016â€™. Since then this stock has done what I did in high school chemistry. Not very much. Itâ€™s really traded sideways. My buddy George S. locked in some stellar premium on some Jan 2019 put sales. 1-2 other traders did something similar. I mean, why not? DDD has been sideways for a while, so - sell some premium.
This can be a fun and pretty volatile stock, especially for traders with smaller accounts. Itâ€™s not overly expensive and it really can move nicely.
From the chart below, the 100 SMA on a weekly chart is acting as a soft support. It still seems DDD is in a longer term accumulation phase down here, similar to the one that formed back in 2011-2012. Very similar price range too.
Earnings is right around the corner, pretty much tomorrow and Iâ€™ll be watching to see how far DDD gaps. Usually this stock doesnâ€™t move too much, but it can surprise investors. If we get the status quo, small gap but big move afterwards, Iâ€™ll look to buy the dip around $15 and look to play it as a long swing OR sell some longer term $13 puts again.
4. JetBlue Airways: Ticker JBLU ~ Analysis on May 2nd, 2017
JBLU price from the first article: Up $1.39 [6.72%]
Oh yeah! Iâ€™m feeling real good about this one. From the emails and other messages Iâ€™ve received, this and AAPL have been the most requested, talked about, traded, and followed stock of the five. Which is great! JBLU has been moving nicely and itâ€™s making the right kind of magic happen.
I posted this in the last review, but it seems this analysis is playing out decently well (at least so far). Hereâ€™s the link for my 2017 projections on JBLU.
More traders than I can count have been playing this one in some kind of way.
In my last write-up, I was looking for a close above $20.84 to be more bullish than bearish. Well, that happened on the 7th of April. And then through the 12th - 18th of April, JBLU came back down to retest the 100 SMA as old resistance new support and bounced quite nicely. Today (the 2nd) JBLU has a nice bullish engulfing candle.
Also, some pretty decent volume profiles have developed over the last few days. Below is a picture of their glory.
From here, now what on JBLU? Well, it will contend a bit with itâ€™s resistance at $22.87. Some did sell a $23 covered call for May over earnings. I expect that to expire worthless. JBLU might take 4-6 weeks breaking through itâ€™s resistance, but from there, seems like clear skies to me!
5. APPLE Incorporated: Ticker AAPL ~ Analysis on May 2nd, 2017
AAPL price from the first article: Up $4.91 [3.4%]
I guess itâ€™s time to talk about everyones favorite. The biggest company in the world. Earnings were released tonight (May 2nd) and they were pretty solid. The earnings per share were $2.10 vs the $2.02 expected by â€˜The Streetâ€™. Their revenue however was an abysmal 52.9 BILLION dollars compared to what most thought it would be of $53.02 Billion. And Iâ€™m sure you picked up on the sarcasm. Iâ€™ve been told Iâ€™m not the best at portraying it.
Regardless, this bullish trend has been a power house. My last analysis was simple. Be bullish, buy the dip. Where? $141.54, which it hit on April 11th. Where was the stop? $138.42
Nice job making at least 2R on that trade, as your likely sold before earnings.
If you didnâ€™t, hereâ€™s pretty much my analysis going forward. This is the note on the chart, in case itâ€™s hard to read. â€œIf AAPL opens below 144.96 (tomorrow on May 3rd) look for a quick bearish 1-3 day trade and then #buythebounce off of the 50 ema (on the daily chart)
If AAPL doesn't open below 144.96, buy the dip from the 10 ema on the daily chart.
That pretty much sums it up. AAPL still appears to be a hold in my book. My 2017 target is still $150, which would be over a 50% ROI from where it was this time last year.
The worst case scenario I see on for the bulls (and my wager with Justin Linderman and many more) is shown below. I think AAPL retesting itâ€™s previous all time high around $136 is plausible and it would be a great buying location and opportunity for AAPL.
Well my good friends, fans, followers, stock market enthusiasts, investors, and Real Life Traders from around the world. Thanks for reading this almost 2,000 word mental description of my trading plan on these 5 stocks going forwards. I hope it was helpful, enlightening ,and most importantly, enriching. That is of course, the mission here at Real Life Trading: To Enrich Lives!
If you have any other questions or need anything else at anytime, just let me know. As mentioned above, my email is email@example.com and I hired some incredible sea turtles to reply to all my emails within 24 business hours.
You rock! And remember, until we meet again, LOVE LIFE, LIVE LIFE and TRADE IT!!
Jerremy Alexander Newsome
CEO and 14,505th most FIT guy at RLT.