Real Life Trading Winter Portfolio 2018: Third Edition
Real Life Trading Winter Portfolio 2018: Third Edition
Hi Traders from around the world! How are you?! Whatâ€™s going on your way?
Are you surviving these swings, ebbs and flows, wild pops and intense drops out there in the market the last 3 months. WOW!! It has been a roller coaster of a ride. Iâ€™m still bullish overall (I know, one of the few) but we will certainly keep going higher from here. It seems like such an obvious [and needed] pull back/rest that we got back in February. Now granted, it was much faster than many traders wanted or anticipated, but thatâ€™s why I do not worry about picking tops. Nor do I place many bearish swing trades during a solid bullish market.
In fact, since August of 2017, I think Iâ€™ve only placed 8 bearish swing trades in total? And since Nov 2016, maybe 13?
Iâ€™ve certainly taken advantage of quick bearish moves and gaps in the day trading sphere, but thatâ€™s just an obvious. That has always been my main focus when I day trade.
But then you get trades like this today that Latoya Smith helped us wreck in the morning day trading room.
Look at that skill! She was anticipating a bearish move and quickly realized she was wrong. BABA, along with itâ€™s solid bullish retest gap wanted to go higher, so she simply flipped bullish and caught the nice pop. This was the bullish retest gap on the daily. And this was the retest on the 5 min chart.
You could have bought the pull back into the 10 ema on the 5 min chart at either one of these purple arrows. The 3rd one with itâ€™s obvious morning star reversal is where the RLT gang went bullish, per the above picture.
This was her post that helped many traders today make 1R on BABA. She posted it in our SLACK channel which also provided many with a text alert as well. How fancy?! ;-)
So, going forward with this market, my plan has been:
â€™Be very quickâ€™ with swing trades. Itâ€™s very choppy. If you see a 1-2R gain, take it. The pull back is probably coming.Continue day trading. The market is ripe for that right now.If you are a longer term trader… hold. This volatility will be around for a few more months, but the broader markets likely will continue higher. Iâ€™m very confident about that.Look to sell a bunch of options!
The amount of directional swing trades has dropped dramatically since early February and my put sales, bull put spreads and iron condors have increased dramatically.
Itâ€™s good to sell options in wide range, choppy markets, especially when the VIX is higher (meaning implied volatility is higher) on options.
Which means, youâ€™ll probably see me doing more of the above 4 items until the â€˜short term to intermediate trendâ€™ in the market calms down a bit and gives regular swing trades more viability.
Letâ€™s hop into the last edition of the Winter Portfolio, since Spring is right around the corner. And as you might have guessed, strap in for a new list and portfolio of stocks to follow for the new season.
1. Knoll, Inc. - Ticker: KNL Analysis on March 15th, 2018
Well, the $20 put sale we did on KNL worked out. This stock too has seen itâ€™s fair share of volatility, but since January it has really just traded sideways. For those who snagged some shares, dividends just recently hit, so thatâ€™s a very small bonus. Otherwise, I do not see much happening on KNL.
Which means, itâ€™s real sideways folks (still).
Therefore, the best plan is probably a put sale again. Like the April $20.Thatâ€™s about all I have on KNL. Boring, sideways, but we are still able to squeak out some small gains with the right strategy.
KNL price from the second edition: Up $1.64 (8.%)
Total KNL price movement the first edition: Down $1.35 (5.7%)
2. MKS Instruments, Inc. - Ticker: MKSI Analysis on March 15th, 2018
There always seems to be one massive winner hidden in these portfolios. And this was the one!Last article I mentioned:
The trend should stay intact for a while, but a close below $93.75 wouldnâ€™t be exceptionally bullish by any means. However, since earnings have passed, the 200 SMA could hold up MKSI pretty well. Since volatility is high in the markets right now, one could consider an 85/80 March bull put spread. Just make sure to check if you can find good premium.
Otherwise, it appears as if MKSI has entered a distribution phase of sorts, where we will see mostly sideways to bullish â€˜chopcity' for the next few months.
Based on the hourly chart, Iâ€™ll be looking for a play like this.That shooting star candle that ended the day on Friday is pretty nice. Right now, as Iâ€™m writing this, futures are pretty flat. I donâ€™t expect any weird or wild gaps. I do believe the â€˜baseâ€™ or â€˜bottomâ€™ of this healthy correction has been put in. From here, Iâ€™m expecting only higher moves. But of course, that can change on certain stocks if we have any nice gap downs!â€
It appears that â€˜hammer of Thorâ€™ on MKSI was the real deal. And we did get a wave rotation / s-curve of types on MKSI like we were looking for. Hereâ€™s that chart.
Also, the 85/80 bull put spread worked out gloriously!
And from there MKSI just kept crushing. After the break out in late February on MKSI youâ€™ll notice that beautiful â€˜buy the salsaâ€™ opportunity as she pulled back into the 10 ema.
Along with adividend payment a few days before, this was a nice trend trade. From here, expect pretty much the same.
MKSI price from the second edition: Up $23.6 (23.6%)
Total MKSI price movement the first edition: Up $22.05 (21.7%)
3. National Grid plc. - Ticker: NGG Analysis on March 15th, 2018
This is the part where I remind us all to win big and lose small.
All your trades should end in one of four ways:
1. A small win
2. A big win
3. A small loss
4. Break even
You should never experience a big loss. If you can get rid of big losses, you have a great chance of being profitable for years to come.
I was pretty excited about this stock potentially bouncing back in January, but nope. I mean, if we are looking at the monthly chart, this is the epitome of sideways.
Honestly, the only trade(s) I can see on this stock would be a break back down to support and then maybe a conservative long play.
And… tha, tha, tha, thatâ€™s all folks….
NGG price from the second edition: Up $1.69 (3.2%)
Total NGG price movement the first edition: Down $4.72 (8%)
4. SMART Global Holdings, Inc- Ticker: SGH Analysis on March 15th, 2018
Another decent winner we found here on SGH. This stock, along with most of the market, pulled back in that early February move.
My last analysis on this one was simple. Wait for a close above 33.23 and hop in. Here was the chart.
SGH closed above that price the very next day on February 12th. I was able to move up the stop on 2/26/18 per this chartand that 100 SMA on the daily really helped propel this cookie higher.
At this point, the pink line represents the prior all time high. That makes sense as a good target to exit the rest of any bullish position, either stocks or shares. Earnings are around the corner on March 22nd. Therefore, if you want to hold over earnings, right on. And if you donâ€™t, look to lock in gains.
I can say, a nice gap or a break out above this all time high and I could easily see SGH continue to climb higher. Feel free to keep your eyes peeled out for this one.
SGH price from the second edition: Up $10.0 (31%)
Total SGH price movement the first edition: Up $5.69 (15.6%)
5. Apple, Inc- Ticker: AAPL Analysis on March 15th, 2018
And then there was old faithful. Fun Fact: According to Apple's latest 10-Q, they have 5,074,013,000 shares. That means $197.08 per share = $1 trillion
We will hit that number this year on AAPL. Thatâ€™s my prediction at least. Myself and a Real Life Trader Richard A. have a fun little wager on AAPL. There were a few other Real Life Traders who have shares on this one and did some covered calls also. Some for April, some for March, many trades did put sales. Here is the current chart I have on it right now.
Just two days ago on March 13th, 2018, AAPL made a new all time high at 183.50. I do not expect this to hold out for long.
As mentioned in the last write up, that bounce off of the 50 ema on the weeklywas SOOOO healthy.
She is just in a nice bullish trend slowly creeping higher. The only trades I could see traders being in at this point, would be bullish ones.
Always own some shares of AAPL. They just make too much money not too. If AAPL pulls back into this green ellipsethatâ€™s where I plan to â€˜buy the salsaâ€™. You could consider a $180 January 2019 call option, shares, bull put spread, put sale or just another short term call.
What is interesting about todayâ€™s candle on AAPL is that itâ€™s a perfect inside day candle. Meaning, the high and low are totally between the high and low of yesterday. Therefore, she is beginning to build some pressure and it would be right off of the 10 ema. A set up like this.
From there, play it how your time frame and plan allows. Just donâ€™t be bearish on AAPL. Look for longer term ownership on this one. I will and always have continued to love this stock.
AAPL price from the second edition: Up $22.24 (14.2%)
Total AAPL price movement the first edition: Up $4.32 (2.4%)
It appears one would be very safe in saying you made killer gains and money from the second edition portfolio, released back on February 11th. Total gain across the portfolio from February 11 equals 16% or 16Râ€™s total just this past month. From itâ€™s inception back in January the total gain across these 5 stocks in this portfolio = 5.2% or 5.2R, which is pretty robust for an accumulated average. Letâ€™s see if we can do it again for the Spring, shall we?
Keep in mind, I write one of these every month and they are 100% free. I could easily charge $599 for one of these. Iâ€™ve seen plenty of other companies do it. However, my mission with Real Life Trading is To Enrich Lives. Feel free to share my thoughts, opinions and analysis with others. AND of course, if you have any questions at anytime, just let me know! :-)
Until next time my friends, remember, LOVE LIFE, LIVE LIFE and TRADE IT!
~ Jerremy Alexander Newsome
The guy who still has Sprint for cell phone service.