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Best Buy (BBY)

May 28, 2015

Keep an eye on shares of Best Buy.

Stuck at the lower Bollinger Band (2,20) with an oversold read near -100 on Williams % Range tells me the stock may be gearing up for a near-term run from oversold conditions.

Recent shifts in consumer attitudes per the consumer sentiment notes have been greatly priced in, in my opinion.

Consider buying to open a long-dated call on the BBY, using the BBY December 2015 35 call up to $3.

 

Dow Jones Shanghai Index ($DJSH)

May 28, 2015

The party is over… Everyone can go home.

Even as the Chinese economy slowed, retail investors continued to pile in, sending the Chinese stock market up more than 140% in a year’s time. It didn’t matter that economists warned the move was unjustified. Retailer investors, including university students, barbers and janitors still rushed into the party.

But no more…

Indexes fell by more than 6% as investors rushed to sell as brokers tightened margin trading requirements for clients, according to Reuters.

One way to play a potential disaster here is by buying the ProShares Short FTSE China 50 (YXI) up to $24.

 

Market Vectors Semiconductor ETF (SMH)

May 27, 2015

Keep a close watch on the SMH.

It just hit an all-time high, and could be setting up to run higher.

Sector trends remain strong moving forward. Momentum is accelerating with solid revenue growth and respectable margin growth, too.

Investors seem to be favoring good upside here, as short interest decreases. Intel, for example, had short interest of 115.2 million at one point. It just recently dropped by close to eight million in recent days.

What’s the best way to trade this?

Consider buying to open the SMH January 2016 60 calls up to $3.60.

 

Oncothyreon (ONTY)

May 24, 2015

ONTY presents us with an interesting situation. On one hand, publishers are talking up the stock promotionally, sending the stock to the moon.

On the other hand, the stock is moving on big excitement surrounding its coming presentation at the American Society of Clinical Oncology (ASCO) meeting, May 29 to June 2, 2015. That’s where it will present information on ONT-380 for the treatment of breast cancer. If all goes well, the stock could go to the moon.

There are two ways to trade ONTY here.

My favorite way is to hedge with one put for every two calls picked up. As we move into ASCO, the stock has the potential to move higher.

But we could also face a sell-the-news reaction… and selling pressure when publishers begin to issue their sell alerts, patting themselves on the back for pushing momentum.

At $3 a share, consider buying the stock up to $3.60, and / or the July 2015 3 call up to $1. At the same time, consider buying to open the ONTY 2015 2 put up to 50 cents. We may have a great opportunity to profit from both sides.

I just ask that you invest reasonably. Don’t mortgage the house on this. This is a higher risk way to trade news flow and the death of news.

 

 

Philip Morris Inc. (PM)

May 22, 2015

A few short weeks ago, I highlighted Philip Morris (PM) as a short candidate. As you can see in this chart, it was challenging the upper range of the channel, and historical resistance points dating back to early 2013.

Failure was imminent at this level.

But the downside is far from over if we look at the over-extensions into deep overbought territory on RSI, MACD and MFI. What I’d like to see here is at least a bullish gap refill around $80 a share. Eventually, I’d like to see a test of the lower range of the channel at $75.

To profit from such a potential move, consider buying to open the PM September 2015 82.50 put up to $2.90.

If you celebrate, have a happy, healthy and very safe Memorial Day weekend.

All my best, Ian

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