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Chart of Day: Fear at Skechers (SKX) Overdone

Apr 25, 2018

After a big gap down from $42 to $29.35, Skechers (SKX) is oversold, having caught support. The only reason the stock fell was because the Street felt that earnings were poor, but they really were not. Sales were up 16.5%. Same-store sales were up 9.5%. International wholesale sales were up nearly 18%. Domestic wholesale sales were up 8.5%. Gross margins were up 230 points. EPS was up 25.2%. Those are great numbers.

Granted, revenue guidance is between $1.12 and $1.145, representing growth of 10%, and a slowdown from this latest quarter’s 17% revenue growth. And management has already noted that while the next quarter may be weaker than normal, the third quarter is expected to be strong. The Street was also worried about margins again, too, as the company embarks on investments to fuel long-term growth. But these aren’t reasons to send a stock down from $42 to $29.35.

Look at how oversold it is on its Bollinger Bands (2,20), MACD, RSI and Williams' %R, too.  That's not sustainable.

Seeing this as nothing more than a ridiculous overreaction, we’re recommending a buy.

There are two ways to trade SKX.

One, we can buy the stock at market prices. And, or two, we can buy to open the SKX June 15, 2018 29 calls.

 

Chart of Day: Trump Effect Pays off with Amazon

Apr 23, 2018

On March 28, 2018, we noted:

Amazon is always an interesting trade, especially after President Trump bashes the stock.  Each time he does, however, the stock races back stronger than ever.  In June 2017, Trump noted that Amazon was getting away with not paying taxes.  Shortly after, the stock fell from $990 to $951.  It would recover to $1,083 not long after.  In August 2017, Trump tweeted that the company was doing great damage to tax paying retailers.  The stock would lose $6 billion in minutes after that.  However, it would also go on to recover that and add even more value.  Today, Trump noted that he wanted to go after the company because it’s hurting retailers and is costing the U.S. many jobs.  That stripped $60 from Amazon’s stock.  However, as we’ve seen many times in the past, Amazon prices in the concern and moves aggressively higher.

At the time, it traded at $1,429.33.

Today, with Trump fear fully priced in, shares of AMZN are up to $1,528.80. That’s nearly a $100 gain just by buying excessive fear. Easy.

Let’s say you also chose to buy the AMZN May 18, 2018 1430 call, too.

At the time, that call traded at $90. It’s now up to $135.

Chart of Day: An Oversold Tech Giant Goes On Sale

Apr 18, 2018

AMD one of the most intriguing tech stocks after being beaten to excessively oversold prices.  The stock is just now reversing well off lows of $9. And we believe it could rally back to test $12.50, near-term.  

The company has quite a catalyst with its Intel deal, a buy rating and a $17 price target from analysts at Canaccord Genuity.

The analysts noted, "We reiterate our positive thesis on AMD which is further underwritten by management's ability to monetize the portfolio as strong near-term crypto-currency GPU demand, stronger Ryzen sales and first Ryzen Mobile launches should alleviate risks in Q4/17, while H2/18 sets up as an inflection point with our industry checks indicating 7nm chip development timelines remain intact for what should prove even stronger CPU products across AMD's roadmap versus Intel during 2H/18 and 2019."

One of the biggest reasons the stock is down is because it was caught up in a sector-wide selloff. It's now far too oversold.  Plus, the company's new lines should drive growth this year, too.  In fact, both Ryzen CPUs and its data center chips could allow it to challenge Intel. Buying and holding AMD here for the long-term is not a bad idea at all.

Buy the AMD stock and/or the AMD June 15, 2018 10 calls.

Chart of Day: Oil Overbought. How to Trade it Now.

Apr 17, 2018

Now that the fear of war over Syria has begun to fall apart, so are oil prices.

While we're bullish long term on oil, immediate-term not so much.  Not only is the fear premium being yanked, but oil prices are failing at the upper Bollinger Band (2,20) with over-extensions on RSI, MACD and Williams' %R.  That being the case, we're looking to short major oil names that also rocketed on the fear premium, including Exxon Mobil (XOM) and Chevron (CVX).  We can buy to open the XOM June 15, 2018 77.50 put at market, and the CVX May 18, 2018 120 put both at market prices.

 

 

 

Chart of Day: Activision Blizzard is Insanely Oversold

Apr 16, 2018

While ATVI recently pulled back, it’s become aggressively oversold on news that Epic Games’ Fortnite and Bluehole’s Player Unknown Battlegrounds took away player and monetization from Activision’s Overwatch and Call of Duty games. We believe that a great deal of negativity from this news is fully priced into the stock and has created an incredible buy opportunity for smart investors. Sitting at its lower Bollinger Band with oversold reads on MACD, RSI and Williams’ %R, we believe the ATVI could recover to $70.50, near-term.

There are two ways to trade the stock.

One, we can buy the ATVI stock at current market prices.

And, or two, we can buy to open the ATVI May 18, 2018 67.50 calls at market.

 

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