Spring Portfolio 2016: Second Edition
Spring Portfolio 2016: Second Edition
Oh my goodness! Real Life Traders, investors and stock enthusiasts from around the world, how are you on this fine day (or maybe night if you are also a night owl)?!
May is chugging along and this earnings season has seen some very interesting moves. Some of the big names like LNKD, NFLX, and GOOGL didn't really have any massive gaps. The retail sector is more or less getting butchered and AMZN is continuing higher nicely.
Gold and Silver have continued higher a bit, but the US dollar is also getting some buying off of a good support. I've been asked often, 'If I don't trade forex or currency, what's another way to trade the dollar?â€ The answer: UUP. You aren't going to get huge moves from this ETF, but it tracks the US dollar nonetheless.
As many of you might be aware, May is Health and Wellness month at Real Life Trading, and June will be conservation month. Remember, we love the markets at RLT, but we also understand there's more to life than just stocks. Each month we have a special theme and focus on interesting topics, subjects, quotes and lifestyles for the month. Without health, we have nothing. It's always a good reminder to know that we cannot allow money to control us. As traders and investors, we can easily control money and control ourselves. It's all about perspectives and plans.
Speaking of plans, let's get to it, shall we?! I am excited! After all, feel free to read this entire article, knowing it was written with zero sales pitch. We simply want to enrich lives! You rock!
AAPL: analysis on 5/17/16
Well, this stock has finally taken a bite out of me recently. HAHA! As we predicted in the last article, AAPL did have a huge issue breaking through the 100 SMA on the weekly and traded all the way back down to the 200 SMA on the weekly. Jim Cramer made a statement on AAPL not too long ago. Someone asked him on Twitter 'What's your plan on AAPL here? Should I buy more, or hold?â€. His response was 'AAPL is an own down at this level, not a tradeâ€.
I agree. I think there's a lot of support on AAPL down in this $90 price range. AAPL had a nasty bearish gap down on earnings, even though AAPL had incredible earnings information.
As of right now, here's kind of what I think AAPL will do.
AAPL right now is having a very interesting time trapping bullish traders and bearish traders. I lost my margin on a 92/91 May bull put spread on AAPL. Why am I telling you this? Well, shoot - because I'm a Real Life Trader. I'm not here to sell you a lifestyle. I'm here to tell you the cold hard facts about trading and let you know how hard it is and how profitable it can be. Yep. I lost on AAPL for sure. I'm going to need to battle back, but I lost small and that's the point. My account didn't go to $0.00, I still have my shirt, my house, my car and my passion for life. HAHA! Lost small folks. It's very crucial.
So, what next on AAPL? Honestly, I don't have much. If you're looking to hop into some AAPL shares for the longer term (1-3 years minimum) I agree with Jim believe it or not. I think this is a solid price on AAPL to buy. I think the lowest it goes in 2016 is $80.00. It's the world's most profitable company. AAPL will survive. Just be patient and we will see if we can find a shorter-term trade soon!
AAPL price from the first article: Down $17.47 [15.74%]
2. X: Analysis on 5/17/16
All right. US Steel. This one might be short and sweet.
Just recently on X we noticed a double top on the daily. The analysis from our last article on X was kind of scary good. I mean, money on the spot! X did pull back and bounce off of the moving averages and continue higher into the $20 range. The April put sale expired and earnings weren't that shocking. However, when dividends came out on X on 5/9/16, the stock really gapped down trapping the shorter-term bulls. X ran right into the 50 EMA on the day, kind of completing the double top.
When we noticed that, we came up with this analysis. Granted, one could have entered bearish on 5/9, which was the close below the neckline or the retest of the neckline (the bounce off of the 50 EMA) on either of the next two days. At this point, since the stock and trade has progressed, here's our analysis. The $12.38 is the next support / target which happens to be the 100/200 simple moving averages. I've gotta give a shout out to a coaching student / trader and friend of mine, George S, who played his first put option trade profitable on X :)
Anyway, if / when X makes it down to $12-ish, those who have been short will likely look to buy to close. That might be a great place to also consider buying to open shares or calls, or sell to open puts. I'll be slightly bullish down there. Leda R is looking to close some of her July $13.50 put sales for a small profit, too.
X price from the first article: Down $2.82 [16.83%]
3. GLD: Analysis on 5/17/16
Oh SNAP! GLD has been a fun and wild ETF to say the least. In our last article, the dollar index really did bounce off gorgeously from the 100 SMA on the weekly. GLD has continued to be more bullish since our last analysis on it. Any April or May bull put spread worked perfectly! Especially the 112/111 bull put spread we mentioned in the last write-up. I've gotta give a shout out to my good buddy, Jason M, who ended up doing a straddle options play on GLD when volatility on the options were low; he bought low / sold high. Great job, Sir McCoy!
Anyway, what now on GLD? Well, best case scenario on GLD, it moves slightly bullish on the short term. The 200 SMA on the weekly is at $127.17 as I type this. That will be a very strong target.
However, as the dollar continues to bounce, gold and silver will pull back on the short term and intermediate term. How far, not sure. But if not in gld or slv right now, I say wait and buy the bigger pull back that likely is coming. There's really very little money in a June bull put spread on GLD. I was looking around the 114/113 area. That's only paying about $0.05 at market. BOOOO… Moving on right?
GLD price from the first article: Up $5.28 [4.51%]
4. FSLR: Analysis on 5/17/16
Honestly, some scary good on analysis. Did you read our last write up? GEEZE! Check out this analysis on FSLR. I actually won a small wager with a good friend of mine. Tim H, regarding FSLR.
At this point FSLR made it to both my bearish targets. Now, I'm contemplating and looking for a bullish play. One could consider some June $42.50 or $40 put sales. I personally think that's a great place to own FSLR. The $50 price range isn't a bad locale either, honestly. I figured maybe picking up some light shares here and adding more as / if FSLR pulls down into $40 might be a good play. That's looking like a pretty solid thought process, for those looking to leg into this stock. The earnings gap on 4/28 was mega bearish, trapping a lot of bullish traders.
The 200 simple moving average on a weekly chart for FSLR is priced at $49.67 right now. Again, that's going to provide some support, but back in July of last year, FSLR broke through the 200 SMA and traded down and eventually bounced off its support. It's a huge channel if it happens, but hey, that's what trading is about right? Buy low / sell high, great risk:reward.
FSLR price from the first article: Down $14.25 [22.7%]
5. IBM: Analysis on 5/18/16
It was announced just two days ago that Mr. Buffett now has a 1B stake in at least two tech giants. It's ironic we're tracking both. ;) IBM is one of those tech giants that he's been in for a while, enjoying that fat dividend every few months. He's still down sizable on that position, but Buffett is hanging on.
If you're still in the short position over earnings that we spoke about last time, you still have a lot of time left on our $140 June put to get some of that money back. Since you own that put, we could sell an underlying put (creating a bear put spread) to bring in premium and offset our costs. That would be a June week 1 138 strike bringing in .46 cents. And if that expires, we will be able to do another one for regular June after that.
Other than that, you might have had to pay dividends on IBM if you were/are short the stock over the dividend date, which was on May 6th.
IBM is in a small distribution phase for sure. I don't have a specific trade set up on it. I was looking at an Iron Condor or simply the bear call spread, but IBM isn't doing very much at all. So, we will see if this sleeping giant wakes up. Otherwise, we will stay patient on it, semi hope it rolls over and take it from there.
IBM price from the first article: Down $1.94 [1.2%]
Just as a reminder, the stocks in this portfolio aren't just 'blind buy signals'. We're just picking five to follow over a 3-month period. Sometimes we will play them bullish, bearish or anything in between with some 'fancy schmancy' options plays. Regardless, I am most certainly having fun tracking these with each of you, reading your thoughts and comments on the stocks and hopefully making a dollar or $451.
Until next time, remember, Love life, live life and trade it!
Jerremy Alexander Newsome