Spring Portfolio 2015 2nd Edition
Traders! I want to welcome you to the write up, Spring Portfolio 2015 , edition #2.
I truly did not realize the impact and fervent intensity you all had for my last thoughts and ideas. It was one of our most repeatedly read articles, so we will continue to produce great content for you. Make sure to keep an eye for a new write-up like this about every eight weeks or so.
Let?s get started shall we?!
Memorial Day is fast approaching and two close friends, six Real Life Traders, and myself will be on a cruise to Mexico towards the end of May. I am really excited about this and I am also quite pumped about the upcoming markets. It appears some bullish breakouts are approaching, there are a lot of triangles out there and I am still bullish heading into the second half of 2015.
Stock #1 AAPL Analysis on 5/20/15:
On the last report, I was bullish to neutral on AAPL with bear call spreads and bull put spreads and even an iron condor or two. All option sales expired worthless and I?m still keeping my eyes on AAPL as a non-directionally bullish trade for the moment.
The earnings numbers are out on AAPL and they blew expectations out of the water. However, AAPL still sold off some because it gapped to a very strong resistance, the price around $133.00
It appears the lower trend line that I drew from the last analysis is still holding strongly as a support. Therefore, my analysis on AAPL is pretty simple. It?s trading semi-sideways to bullish. I will continue doing bull put spreads and bear call spreads on AAPL until it closes above $135 (to be pretty bullish) or closes below $124 (to be slightly bearish and looking to buy the dip.) The only real NEW trade that we?re not into already would be waiting for AAPL to either break the $134 resistance bullish or roll over. From there, I would consider either a 136/137 June week two bear call spread or a 140/145 June bear call spread. The spread would depend on the premium and candles. IF AAPL did roll over a bit from the all-time high, one could look to leg into a bull put spread, somewhere below $124 to complete an iron condor.
If you did decide you like an iron condor right now, a 140/145 -120/115 June iron condor is paying about $0.35 cents, which is 7% return on a $5.00 margin. I give this a 93% chance of expiring worthless by June 19th, 2015.
For those who currently own shares, potentially from my last report many traders are getting into the $135 June covered call, which is paying about $1.00 per share premium as I write this. I think this is a great covered call because getting exercised at $135 is a guaranteed profit, regardless of where you bought the stock (since it?s at an all-time high.)
AAPL price from last article up $3.0 2.4%
Stock #2 SDRL Analysis on 5/20/15:
SDRL has been a fun one! As I mentioned in the last article, I was bullish on SDRL and on a longer-term portfolio / position (5 years or so) I still am. On the entire energy sector in general I?m expecting a low (or even a lower low) to come in around August 2015, then a longer term, semi-boring, but bullish outlook. The whole, buy low / sell high situation.
From our last article, SDLR really was the big winner. It did?exactly what we planned it to do. Great job, traders. As mentioned ?Volume is increasing nicely and I?m excited to see this retest a tad on 4/8/15, then look to buy around $10.49? The low of the day on 4/8/15 was $10.19.
On 5/6/15 SDRL hit our $15.02 target. That?s a 47.39% increase in about one month! That?s incredible! Great job, folks!
So, what now? Well, my next target now is $18.25 I want and expect SDRL to pull back some. Earnings are approaching, that?s important to keep in mind. My trading plan on earnings is simple.
If SDRL gaps down to the $10.00 area again, that would be a buy for me. Stop is $7.50 and target is $18.25.
That blue line is my 100 simple moving average. That?s going to prove to be a semi-healthy buying location as well.
IF SDRL gaps up above $15.50, that will be a very strong gap and an immediate buy for me. Stop placed somewhere in the gap, target, still $18.25, or wherever the 200 simple moving average is.
IF SDLR has an uneventful earnings report, I could consider June or July $10 or $11 put sales to hopefully get put the stock at a cheap price and ride it up again!
SDRL price from last article up $2.00 but did hit target and completed trade. Currently up 18.8%
Stock #3 FEYE Analysis on 5/20/15:
This is an interesting little beast lately. It ran hard two or three weeks after my last analysis. The put sales expired profitability and if you are in shares, you?re sitting on some nice positive equity.
That?s really my analysis on FEYE currently. I am still bullish to neutral as FEYE is seemingly forming a bigger triangle.
I again don?t have an e xact numerical entry other than that one could consider put sales or just buying shares now. A trader could use that blue line (the 100 SMA) as a good stop. The $37 June put sales are only paying $0.25 of premium, which is okay. I would prefer to see $0.35 or $0.40, though.
At some point this triangle has to break out. My thoughts are, it won?t happen for another two or three weeks at least, but if it does I would wait for the retest if you?re waiting for it to break before getting in.
FEYE price from last article up $2.36 5.9%
Stock #4 F Analysis on 5/20/15:
Last time we checked out FB together we took a sneak peak at the weekly chart. I still agree with my sentiment from then. ?I?m always slightly bullish on FB.?
FB did have some pretty volatile moves recently. Earnings came out, which was a non-event, really The strategy that has been working the best on FB is owning shares and just doing covered calls or doing three to four week put sales under a strong moving average. I still expect FB to pop slightly as it finally hit the 200 SM A for the first time since July 2013. Then on 5/14/15 FB had a solid rally.
It appears FB created a very small double bottom and the price action of today?s candle (5/20/15) was a retest of that neckline. Therefore, if FB continues higher and closes above $82.04 I will still be slightly bullish, buying shares and selling covered calls and selling puts as it slowly continues higher.
The $76 June put sale is bringing in $0.64 cents minimum, which is healthy. I think $100 is an amazing future target for FB, but it could take over a year to get there.
FB price from last article dow $1.77 -2.1%
Stock #5 TTW Analysis on 5/20/15:
Wow. What a gap this stock had from earnings!
On the last article I had three scenarios.
A) Going long now at $25 and setting a trigger to buy a protective put at $24.03 (so about $1 of risk) and then adding to their TTWO position if TTWO closes above $26.33, completing a pretty sizable double bottom. If you did this one, the protective put did get triggered, which was great because then you would have had a protective put over earnings. TTWO gapped up large on earnings, but could have easily gapped down just as large. Choice A would have been the most profitable trade for sure.
B) $24 April 2015 put sale for $0.10 cents Expired worthless. Boom.
C) Waiting for TTWO to close above the neckline of the double bottom before getting in bullish. You?ll still probably be waiting to get in. Let?s look at my most recent analysis.
TTWO had an amazing and perfect gap and go from earnings on 5/19/15. I am absolutely keeping a very close eye on a bullish entry on this guy after that type of gap.
Since I did it last time, I?ll do it this time again on TTWO. One could consider?
Watching the hourly chart closely and going bullish above $27.82 with a stop at approximately $26.34, with target one at $30.16.
26 June 2015 put sale for $0.25 cents. This looks like a great choice if you don?t mind owning shares at $26, and who would after a bullish gap like that? I?ll give this about a 99.54% chance of expiring worthless.
Waiting for TTWO to possibly pull back a tad more and buy on the pull back. Create a limit order to buy on the dip at $27.50. Place a trigger at $26.80 to buy protective puts. Ride the stock down to $25.37, sell to close the protective puts, buy more shares and sell a Sept $30 covered call.
Whichever strategy or plan you create on TTWO, I would make sure it has a little bit of bullish perspective to it. In a class today, I related it to the gap on HA back on 7/22/2014 and you can see how that unfolded.
TTWO price from last article: u $2.51 9.9%
Thanks so much for reading my analysis! I truly do appreciate it. Tell your friends and family about Real Life Trading, follow me on twitter (if you have one) @newsomenuggets and come back in a few weeks when I post an update to this portfolio. You rock!
Jerremy Alexander Newsome