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Chart of Day: Disney (DIS) Pops -- Take your Gain

Nov 19, 2017

On October 10, 2017, we noted:

Disney (DIS) may have its share of problems with ESPN at the moment, but with the latest installment of Star Wars set for December 2017 release, we may begin to see signs of life in the stock. The force, as they say, may be strong in this one. Sorry, I’m a big fan of the movie. As we saw prior to the release of the December 2015 installment, shares began to rocket higher, falling after the release of the movie. Anticipation drove it higher. Once that anticipation effect faded so did the stock. We see this sort of thing happen all the time when trading news.

At the moment, we believe DIS is aggressively oversold and could begin to push higher on anticipation of the movie. It may sound like a nutty idea, but we often see it work well. There are two ways to trade such an opportunity. One, we can buy just the stock here around $99.50 and hold. And two, we can buy to open the DIS December 15, 2017 100 calls at market prices.

It wasn’t just Star Wars that sent the stock higher though in recent weeks. The Street is getting even more bullish on the company’s Internet video streaming services. In fact, many analysts believe it may be able to compete with Netflix.

Shares of DIS are now up to $103.44. The DIS December 2017 100 calls last traded at $4.09. When we first brought this call option to your attention it traded at just $2.80. At $4.09 you’re looking at a good win. Sell to close half.

 

Chart of Day: The Marijuana Trades to Own Now

Nov 14, 2017

Controversial or not, one of the hottest investments of 2018 could very well be the marijuana story. In fact, even after some monster moves in the sector, there’s still further upside remaining. As a matter of fact, one of my favorite stocks – Canopy Growth (TWMJF) – more than doubled over the last few weeks on excitement surrounding the issue of legalization.

Adding fuel to the fire, Constellation Brands just took a 10% stake in that stock. It also acquired warrants that will allow it to buy even more shares in the future. It’s an interesting move as alcohol use declines, as the use of marijuana increases.

Even more interesting, according to Marijuana Business Daily, we could see marijuana sales growth of 45% just in 2018 in the U.S., as well as a 300% aggregate push higher in sales between 2016 and 2021 to $17 billion. At the same time, a recent Gallup poll showed that 64% of Americans want to see marijuana legalized nationally.

Another big catalyst is Canada, which could legalize it recreationally in July 2018.

For those reasons, we’re recommending that you diversify among the following trade ideas:

  • Canopy Growth (TWMJF)
  • OrganiGram Holdings (OGRMF)
  • Kush Bottles (KSHB)
  • Horizons Medical Marijuana Life Sciences ETF (HMMJ)

Chart of Day: Buy the Most Hated Stock on the Market

Nov 13, 2017

AT&T (T) has been beaten silly. However, most of the pain may have been priced into the stock already, handing us an opportunity to "buy the blood in the streets," as Baron Rothschild would say. It also gives us an opportunity to "buy when others are fearful," as Warren Buffett says. Interesting to note, an executive at Berskshire Hathaway just bought a million shares of AT&T for $33.75 each. Plus, we have to consider that the stock still pays out a respectable dividend, which seems safe given that the company is still generating a good amount of free cash flow.

Technically, the stock looks like a disaster at first glance. However, it appears to have found support at current prices  with incredibly oversold conditions on RSI, MACD and Williams’ %R. We believe that with a good amount of patience, we could see a test of $38.  Buy to open the T February 2018 34 calls at market prices.

Chart of Day: AMD Target $14

Nov 07, 2017

Over the last few weeks, shares of AMD took an incredible hit, falling from a high of $14.25 to $11.03.  However, we are just now seeing signs that a bottom could be in place.  Not only are traders flocking to call options these days, but the stock appears to have caught and held support dating back to earlier this year.  As long as this holds with oversold reads on RSI, MACD and Williams’ %R, we’d like to see a potential bearish gap refill at $14 a share.  

Buy the stock, and, or the AMD January 19, 2018 12 calls.

 

 

Chart of Day: Expedia (EXPE) Insanely Oversold

Nov 06, 2017

Shares of Expedia (EXPE) have become excessively oversold after missing earnings estimates.  But with a good deal of negativity now priced into the stock, we’d like to see a bearish gap refill around $147.50 at some point.  

Even RSI, MACD and Williams’ %R are deep in oversold territory at the moment.  

The last time Williams’ %R was this low, the stock exploded from a lof of $125 to $160.  

Personally, I think this is a solid opportunity.  It’s far too oversold. Buy to open EXPE December 15, 2017 125 calls.

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