Winter Portfolio 2016: Third Edition
Winter Portfolio 2016: Third Edition
Hey traders who exist solely on planet Earth. I hope you are doing terrific! Spring is right around the corner, the weather is heating up and so are the markets.
Long term, I remain neutral. I'm still in a very buy low, sell high ; sell high, buy low mindset. The SPY is still in a giant consolidation phase, trading sideways and distributing. It has all the showings of a large channel and I plan to trade it as such.
Let us embark on this visual journey of stock analysis! I am excited about what the future holds and I hope some of the recommendations are in line with your analysis, also!
#1 AAPL - analysis on 3/11/16
Well, AAPL is still relatively bullish. Since our review began in January, the 200 SMA on AAPL has held up pretty well.
There are a few potential patterns shaping up right now on AAPL on the daily chart. We got a possible double bottom, possible multiple bottom, possible cup and handle. Maybe your eyes see something different, too.
Regardless, the gap on March 1st screams to me 'I would love to head higherâ€. AAPL has interacted with the 100/200 simple moving averages from the bearish perspective back in November / December. Meaning, if it's happened once, it could happen again, and likely will. I think that's where AAPL could be headed, especially with the rumors and new iPhone announcements coming up.
**Locking in some profit from the above set up.**
On the more recent term, AAPL looks like a flag. A more aggressive bullish entry would look something like this. I like the bullish gap from 3/10/16 to 3/11/16 on the hourly chart. The 100 SMA would be my target.
AAPL price from the first article: Up $2.28 [2.2%]
#2 BP - analysis on 3/11/16
This one might be short and sweet. BP hasn't done much at all in the last few weeks. It really has been chop city. As long as the $26.87 support holds on BP, I'll lose my wager for sure. BP is facing a strong lower trend line, but appears to be building a potential inverted head and shoulders.
If BP cuts it's dividends (like many energy companies have) it could slide a bit lower. With earnings in late April (which I expect to be fine) BP looks stable. I love this company long term and if you want to own shares a $27 April put sale makes sense. If BP can break out of the $33 resistance and cruise through that bearish trend line from the north, it will likely do what BP does. Trade bullish to sideways over the long term and pay a healthy dividend.
*In the cartoon voice* 'That's all on BP folksâ€
BP price from the first article: Up $.77 [2.5%]
#3 DIS - analysis on 3/11/16
We got stopped out on the bearish analysis from edition #2. As I mentioned, 'If we look at the above DIS weekly chart we see what appears to be a massive double top and we also see a large morning star reversal pattern. Which sentiment will win out. I do not know.â€ It appears the morning start sentiment won.
At this point on the daily, DIS looks like a healthy inverted head and shoulders pattern. (Yep, there are many out there in the markets right now).
One small concern for the bulls is the 100 simple moving average on the weekly: it's at $98.85. The high of the most recent week is $99.71. A close above that and DIS would likely continue higher. Since I was trapped on my bearish analysis on DIS, it would make sense to now flip to bullish, unless of course this stock continues acting goofy.
Below is the daily chart and our most recent analysis and trade set up on DIS.
As a potential longer term, blue chip kind of trade, this meets the criteria for a buy low and sell high. If you have any friends or relatives who love DIS and plan owning for a bit and have been looking for a decent place to buy, this looks like one!
DIS price from the first article: Down $3.52 [3.46%]
#4 BABA - analysis on 3/11/16
Oh snap! BABA didn't roll over at all! I wanted one more short at it again in the $60 price range. As I mentioned last time 'The gap on 2/16/16 was quite bullish and trapped some of the lingering bears on BABA.â€
Well the gaps on 2/26 and 2/29 were also strong on BABA. The March put sale will expire just fine. I went ahead and BTC on that BABA put sale a few days ago, because I needed to free up some margin/cash for some spread trades I was in.
At this juncture on BABA, I don't foresee BABA not making it to $75, its next target. That's where the 100/200 simple moving averages on the daily converge along with a decent resistance price.
Only time will tell if BABA breaks through that resistance or not. What I would like to see is a break through and then a bounce off of the $75.80 old resistance, new support. BABA could also roll over from $76-ish. This would probably be a great place for a bracket trade and / or a collar / covered call if you have shares.
BABA price from the first article: Up $1.33 [1.8%]
#5 FB - analysis on 3/11/16
It seems FB wants to continue and grind bullish. It's not a very exciting stock, but does like to creep higher quarter after quarter. I lost a tad on the bear call spread I had. Had I held, it would have expired worthless, but I exited for a small and manageable loss on 2/22/16.
Since then FB has bounced off of the 100 SMA a few times. FB loves its long term moving averages like I love Snicker Bars.
I was hoping FB could roll down into the $90's again so I could pick up some shares, but that might not be the case. This is a fun stock to own and sell covered calls on.
FB had great earnings numbers and is still blowing its competition and other social media sites and companies out of the water. I doubt FB will ever make a bid to buy TWTR. It doesn't have to at this point. Plus, TWTR needs to work on its business model to actually generate money! Just like LNKD.
I've made the claim before and I'll say it again, I think FB is a $150 stock at 2016 year end. Its gains are slow and arduous, but let's remember it's had over a 425% growth since July of 2013. That's three years ago, mind you. It's a revenue giant, with over 1,000,000,000 users. A close above $110.68 and this bullish train likely continues.
A lot of traders are looking to short this (like I was), but if FB takes out some of these recent highs with a close I think the short traders will get squeezed out and FB continues higher.
FB price from the first article: Up $10.04 [10.1%]
Real Life Traders from all over the world, it's been a privilege and honor trading with you in the first quarter of 2016. As you know, March is Kids month at Real Life Trading. We are celebrating the enthusiasm and energy kids have towards learning and doing our best To Enrich Lives. I'll see you in just a few weeks for the Spring Portfolio!
Until then, remember, love life, life live and trade it.