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Chart of Day: Never Fear Chaos... Buy it.

Feb 22, 2017

Sometimes, to make money, run into chaos.

On February 2, 2017, DSW Inc. (DSW) was sitting at bottom of trend, having its back-end handed to it in a tough retail environment. The fearful sold. The brave ran in, as we recommended. Technically, as it began to recover on reversing, and very oversold RSI, MACD and Money Flow, as well as with Williams’ %R, the stock was ready to bounce. Since hitting $20.88 on the day of recommendation, the stock is now up to $22.07 and ready to refill that bearish gap around $25. Once it breaks through its 50- and 200-day moving averages, it could take off big. We’ll still recommending a long position on it.

Chart of Day: Gains shouldn’t be this easy

Feb 21, 2017

Talk about easy.

On February 14, 2017, we noted:

After falling on earnings, shares of GIMO have become technically undervalued on our momentum indicators, including RSI, MACD and Money Flow. In fact, all three indicators are beginning to reverse higher as we speak. With a likely bearish gap refill at $43 at some point, near-term, we may be able to do well with the GIMO April 2017 35 calls up to $2.65 and, or the March 35 calls up to $1.60.

A week later, we’re already taking gains off the table, as GIMO jumped to $36.40 today. The GIMO April 35 call – which could have been picked up at $1.90 – now trades at $3.20. The GIMO March 35 calls – which could have been picked up at $1.25 now trade at $2.35. Sell to close half of each.

As the underlying stock begins to rebound, we’d eventually like to see a potential bearish gap refill near $45.

 

Chart of Day: How to Trade CENX Now

Feb 20, 2017

As much as we’ve enjoyed watching the price of aluminum soar in recent months, we have to be smart about the trade.

On December 20, 2016, when we first spoke about the potential of Century Aluminum (CENX), it traded at just $8.55 a share. It’s now up to $15.25 where it’s beginning to slip from its highs. Even Williams %R, MACD and RSI tell us it’s time to pack it in and take our gains here.

Even the Dow Jones U.S. Aluminum Index is beginning to turn lower. The last thing we want to do is be caught with long positions when it all comes falling down.

But we’re not done with CENX just yet. We may be taking our longs off the table, but there’s still a great short opportunity here. In fact, if CENX breaks down from here, it could eventually retest near $8.43. One way to trade that potential is with the CENX June 15 put up to $2.55 and, or March 2017 15 put up to $1.30.

Chart of Day: Lowe’s could Turn Lower

Feb 19, 2017

As much as I’ve enjoyed watching Lowe’s (LOW) run higher in recent weeks, it’s tough to ignore the downside warning signs. RSI, Money Flow and Williams %R are all telling us the stock could pivot and turn lower after failing at a similar resistance point back in August 2016. What we want to do is profit from a swing lower ahead of earnings on March 1, 2017. Consider buying to open the LOW March 77.50 put up to $2.80.

Chart of Day: Dick’s Dives

Feb 16, 2017

Back on Christmas Day 2016, we issued an alert on the DKS February 52.50 put and the March 50 put. Yep, even on holidays we work. Opportunities don't take time off either. So why should we?

When trading resumed post-holiday, the February 52.50 traded at $2.65. It hit a high of $4.50 on Thursday. Sell to close. The March 50 put traded at $2.85. It’s now up to $3.50. But we’re going to hold the March trade because there’s time remaining, and it’s quite possible that DKS could fall back to $40.

A new falling knife is in play. And if you have yet to trade DKS, you still can with a position in the DKS March 48 put up to $3.

 

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