Summer Portfolio 2015 Third Edition
Summer Portfolio 2015 Third Edition
Hey, Real Life Traders from all over the world! How are you on this fine day (or night, depending on when you can take a break from your awesome and busy life to read this)?
Apparently the summer gave us more to talk about than I really thought it would. I'm sure you've heard by now about the simply tremendous drop that has occurred in the markets. It's been 'the talk of the town', if the town was the world. It's kind of a big deal. I think it's just the beginning, too. As much of a perma-bull as I am, I can flip my perspective with just one candle. One candle can change everything.
July and August have been great for day trading. They've been less than stellar for my swing trades, though; specifically my credit spreads. I've done a great job mitigating risk on some of them, but this volatility and the swings of the overall market have just been wild! Because of this, most of our Summer Portfolio stocks are down quite hard from our last update. However, the good news is, most of the specific trade set-ups we did played out before the market crash. Let's talk about those now.
Stock #1 NQ - Analysis on 8/26/15
At this point I am wondering and considering who might buy out NQ and why. It's probably going in my 'potential merger and acquisition pile'. Granted, fundamentally, I really don't know how good this company is, but based on the technical charts it's at a 52 week low and it broke some solid supports!
This trade and stock was one that simply didn't work, and those happen about 50% of the time, usually. How much was lost? Well, after the covered calls and protective puts and put sales - around an R. Overall, good risk mitigation!
NQ price from the first article: Down $2.26 [45.5%]
Stock #2 SHAK - Analysis on 8/26/15
Still haven't had the opportunity to eat at one of these places yet. I do love milkshakes though!
This stock is super volatile! We've had the chance to take a run out two times since our last article. Last time I mentioned 'If you aren't already in this, if it pulls back to $54.62 one could get in where I did. Dean C. had an awesome limit fill the morning of 7/21 and got in at $53, I think. Either way, I'll be out of SHAK before earnings on 8/12.â€
SHAK pulled back very nicely on 7/27 and 7/28 giving some buyers one more shot before it really moved. We took that opportunity to lock in some profit on SHAK. THEN, after earnings, on 8/13/15, I noticed a nice high wave candle and a pretty bearish gap. Here were the two trade set ups I posted from that candle.
Both trades were pretty hard to do with shares. The first link is the day trade. Unless you traded put options, SHAK was unable to be shorted that day, for whatever reason. Pathetic market pansies! Scared to really let a stock fall. HAHA!
Regardless, the swing trade was a quick one as well. The analysis worked on both. That really is the definition of active trading. Bullish positions and then in two to three weeks, bearish positions. Actually, they all worked well!
It's hard being a bull with the market shaping up the way it is right now. I would say on SHAK, the $40 price range is a good support and nice round number for buying. The main issue is the higher low on the primary level from a few weeks back. Therefore, if you want to buy around $40.00 on SHAK, make sure to get some confirmation on either the daily chart or the hourly chart.
Selling puts could work, but get ready to bail on those if the stock doesn't work. I think if SHAK breaks the $39.67 support line I have drawn, it's likely going to head lower, much lower. Only issue is, you'll likely have a very hard time actually shorting the shares. Might be able to buy puts though. Only time will tell, but I'm being patient on SHAK for now.
SHAK price from the first article: Down $9.86 [17.4%]
Stock #3 ETSY - Analysis on 8/26/15
I still don't have an ESTY account (just in case you were wondering). I'm not very crafty. I told Ashley she should get one. She's a pretty good painter.
This stock has had some wild swings and like a few other stocks it is at a strong support, but some might simply be scared to take it because of the potential market roll over. I agree. There could be one coming, but at the end of the day, it's just 1 R risk. Very similar to this trade.
It got us a few R's very quickly. So, if it worked two times before, it could work again.
The last trade set up I posted on ETSY did work out okay. Most people just exited it for a small gain or very small loss before earnings, but it triggered on 7/30/15.
Since the market is a tad bearish, I want a close above our trigger. The stop value is $2.70
Therefore, if you have a swing trade R of $1,000 - you're looking at 370 shares.
Target 1 to either take 1/2 or move the stop would be $17.50. The exact 2R target is $19.73
ESTY price from the first article: Down $1.27 [9%]
Stock #4 AAPL - Analysis on 8/26/15
Probably my favorite stock to trade has most certainly given many incredible opportunities as of late. With some wild and incredible moves, AAPL was one of the first stocks to recover from the selling on 8/24/15.
If you remember my analysis on AAPL, I thought it would bounce around $122-ish. It never even really gave us a chance to do any buying. On 8/3/15 it just crushed that support. From last time I wrote this:
One could 'go ahead and get into a longer term bull put spread now. An August week 4 118/117 for $0.15 limit looks very doable. It's a long time to wait for sure, but the $119 support along with the 200 SMA should prop up AAPL and keep it above $118 before the fourth Friday in August.â€
Well, I had many traders who had to unravel their bull put spreads on AAPL (successfully I might add). That's always good news! It's all about defense and risk mitigation.
At this point, kind of with the entire market, I'm expecting a slight roll over of sorts. Potentially nothing too massive, but the roll over should get signaled with a nice doji or something.
At this level on AAPL, I'll go ahead and call what I see. A potential head and shoulders pattern. Meaning, AAPL could retest as high as $120. If AAPL pulls back to around the $112.82 price I marked and drop, I'll look to go short term bearish. If it keeps skyrocketing through that price, I'll see about the retest around $120. Either way, I am slightly considering a 122/123 Sept bear call spread if I can get good premium for it.
We did get into one for August that worked out as it should have; one of few.
AAPL price from the first article: Down $16.91 [13.35%]
Stock #5 AMZN - Analysis on 8/26/15
HEY! It's a stock that's actually up from the first article. Haha! Truth be told, AMZN is the one that is slightly the most bullish out there. It retraced very nicely to a prior all time high and the 100 simple moving average.
However, with the market doing what it did and the huge selling pressure on AMZN, I'm going to assume it might act like all of it's other brothers and sisters. If AMZN pulls back to $523.79, it will meet some resistance, namely, old support, new resistance. Granted, today's candle (on 8/26/15) is slightly bullish. The main question is, will it continue higher on 8/27/15 or roll over some. If AMZN does go higher, I'll look to short it (shares or puts) because that would be a lower high.
My target for the bearish trade would be the 100 SMA again and then potentially the 200 SMA one day.
AMZN price from the first article: Up $66.94 [15.39%]
I will say, what will be super interesting if these flash crashes that occur just turn out to be a great buying opportunity. I'll be a little upset that I missed them. On the weekly charts, you look around and there are just so many bullish candles with good volume this week. However, a lot of major moving averages were broken, which makes me put the bullish move in suspect. If anything, the general market (and some stocks) make it back to their all time highs and then get met with heavy selling pressure.
I do love being a perma-bull, but even after some of these candles and volume that are shaping up, it makes one wonder. My bearish bias is more short term. Unless we roll over with some amazing volume and candles, and unless we start taking out the low of 8/21/15, I'll be bearish short term and still bullish longer term. It's all based on the roll over, location and volume.
I can say too, our Fall Portfolio might live up to its name. Remember, these portfolios or 'stock analysis'that I've been doing aren't specifically just BUY THESE STOCKS, but they're more of 'I'm following these stocks pretty much daily for this quarter and season.â€ So even though the Summer Portfolio ended with a net loss of 69.86% - that's just the change in the value of these five stocks cumulatively. Obviously, one wouldn't have lost 69.86% of their account. And that's why the R trading method is so crucial.
Any one can like any stock, trade or company. As long as each Real Life Trader makes risk mitigation their main objective, creates a plan around that and follows through, it will all work out in the end.
Fall is approaching, students! Many of our stocks and trades might be bearish ones in the fall of 2015. Either way, we will be ready to trade them! Let's stay focused on our objectives! To simply trade our plans!
Love life, live life and trade it!
Jerremy Alexander Newsome