Spring Portfolio 2016: Third Edition
Spring Portfolio 2016: Third Edition
Hello lovely people and Real Life Traders from around the world, I trust you are doing wonderful and sensational!
I'm currently writing this from gate A4 in the Burbank, CA airport. My flight actually leaves from gate A3, but I'm a rebel. The market opened up huge today (on June 20th and I'm just trying to soak it all in; some amazing volatility recently, which has been fun and exciting for day traders and option sellers.
Let's talk about some swing trades and update the world on the 5 stocks we've been following for this Spring Season. Summer is here and you'll be getting our new Summer Portfolio soon!
AAPL: Analysis on June 20th, 2016
This is a pretty interesting article on $AAPL I just read on Yahoo Finance. Goes into the speculation that AAPL is 'set to lose their weighting and be reclassified in the annual reconstitution of the widely followed Russell indexes.â€
I'm sure that will shake out some investors on AAPL. Mr. Buffett got into a large position a few weeks back and our analysis from the most recent portfolio suggested that AAPL would likely continue higher. It did end up trading higher into the 100 SMA on the daily. Many traders snagged some nice covered calls into that area, selling the $105 June covered call. My good friend, Stan J, has the $110 July covered call.
What's going to be very interesting is if AAPL can form a higher low (relative to mid-May) and close above the strong $97.50 resistance; my July / August target will be the 200 SMA on the daily chart (about $105.75 as I type). Earnings are also in July. My objective will be to let AAPL trade up a tad higher and sell some July covered calls above that 200 SMA, expiring before earnings. Then, sell some other covered calls over earnings, likely in the $115 - $120 area. Only time will tell what AAPL is doing.
Many traders made some decent coin on put sales and covered calls from the bounce off of that $92.37 support, and some are looking to do that again if afforded that opportunity.
AAPL price from the first article: Down $14.8 (13.3%)
2. X: Analysis on June 20th, 2016
As of right now, I'm in flight between Phoenix and Nashville. Real Life Trader, Chris Irwin, just moved to Phoenix not too long ago. It was a warm morning there and the airport was packed. I was just barely able to sneak enough time to grab a roast beef sandwich and some chips which I plan on eating very soon.
So, United States Steel has been an absolute profit machine the last few weeks.
From our second article posting one month ago, we've been in a few trades on X. The last time I was in bearish hoping it would hit my bearish target. NOPE! It got very close though. The 100/200 SMA on the daily was my target. Missed them both by a few pennies. They did create that bullish cross on the 17th of May or so. Many other traders recognized the solid bullish retest gap from May 25th - May 26th. Well, that gap did indeed retest.
June 2nd was the 'buy me now, please' candle on the daily. The hourly didn't look too bad either. My adopted grandmother, Leda Roberts, snagged some solid June 14 put sales at some point, which expired worthless. Many did a similar trade. Then June 7th - June 8th created another nice bullish retest gap, which also retested. June 15th had a gorgeous new white solider candle and X was off to the races again.
For those currently in bullish with shares, and it's a lot of you, the $21 resistance area will be a strong one. A great place to sell some covered calls for July or August (which will be over earnings).
That's all I have on X at the moment. A break above $22 and a retest of that level would be a good indication of a longer term buy. I really have liked what's been going on recently with X!
X price from the first article: Up .62 (3.69%)
3. GLD: Analysis on June 20th, 2016
'I want to know where the gold is at. Show me the gold!â€ A classic line from a viral youtube video.
This ETF has been a wild one as of late. With massive moves in the US Dollar, European Banks, and potential interest rate changes, the value of gold has fluctuated tremendously. GLD tracks that movement and is an exciting way to trade the precious metal.
The chart below is the weekly chart. Notice how well the 100 SMA (the blue line) and the 200 SMA (the red line) have both been acting as support and resistance. Gold really has seen some solid bullish volume spikes in recent weeks.
On the daily chart, GLD has an ominous bearish engulfing candle on June 16th. That signal, coupled with the strong 200 SMA on the daily gives me a bearish trigger to sell a bear call spread for July. 127, 128 if GLD breaks below $122.06. I would like to get at least $0.10 for that spread. Right now, it's trading at about .23! YES!
Our last two write-ups on GLD, we've been bullish to non-directiona. It appears GLD is in kind of an inverse triangle / channel looking pattern. Could it break out higher? Absolutely. It's going to require the US Dollar to continue declining though. Just watch those long term moving averages on GLD. Don't take the break out of any direction. Take the retest. If you often find it difficult to decide when to do that, check this video out.
GLD price from the first article: Up $4.95 (3.46%)
4. FSLR: Analysis on June 20th, 2016
FSLR has been rampaged by some amazing gaps in recent weeks. April 5th and April 28th were the two most significant, really causing some bearish pressure on FSLR. For the most part I've been excited about buying this stock low. I've been mentioning over the last few weeks and months '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. All of the $42.50 and $40 put sales expired worthless on FSLR. One could consider that route again.
It does appear FSLR is still in a possible wave 4. If FSLR closes above $51.67, I'll contemplate another wave count, as that could be the neckline of a healthy double bottom. $40 has been a great support for a long time! A really nice channel on FSLR. Still keeping my eyes to buy low at that level, but if FSLR begins to run here I'll be pleased about that as well.
FSLR price from the first article: Down $13.8 (21.985)
5. IBM: Analysis on June 20th, 2016
Alright IBM. 'You didn't want to make it easy on me and fail that resistance did you?' Apparently not. IBM has beat me up 3-4 times in recent bearish trades. But, we lost small on all of them! That's key!
What now, IBM? Well, it's still battling a very strong resistance level. It did break out of that 'triangle' type of pattern and has appeared to retest. It would seem to me as much as I might want this to move bearish, just because I want something to happen doesn't mean it will. In trading, we can always create a plan. What's crucial is knowing when it's working and when it's not.
Therefore, I'll be looking to cautiously play this one bullish. The only reason I even say cautious is because the weekly 100 and 200 simple moving averages will totally provide some solid resistance. I don't have 100+ shares of IBM, but if I did, I would be looking to sell some covered calls around that area after a few small strides higher on IBM.
IBM price from the first article: Up $4.10 (2.73%)
Just as a reminder, the stocks in this portfolio aren't just 'blind buy signals'. Here at Real Life Trading we are picking five solid, disciplined, well known stocks, companies and ETF's to follow over a 3-month period. Sometimes we will play them bullish, sometimes we will be bearish or perhaps I'll show off my option trading skills. We are always here to provide assistance, help in any way, educate, entertain and of course, enrich!
Thanks so much for reading. I got two hours left on this flight into Nashville. About to knock out some emails and start prepping some analysis for a few weeks coming into earnings season. See ya soon!
Jerremy Alexander Newsome
CEO and 'The Dude' at Real Life Trading