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Wynn Resorts (WYNN)

Jun 04, 2015

It took some time…

But patience paid off beautifully.

On May 18, we featured Wynn Resorts (WYNN) as a Chart of the Day. At the time, it was the second biggest loser on the S&P 500 after Barclays downgraded the stock from ‘overweight’ to ‘equal weight.’

Worse, T. Rowe Price – the stock’s biggest shareholder – cut its stake. And that’s after disappointing results and a cut to the company’s dividend, as we noted.

But we argued the worst might have been priced in.

In the immediate-term, we were wrong, as the stock moved lower. But we were convinced the market was severely and unfairly discounting the stock. We recommended buying the WYNN July 2015 105 call on May 18. We were able to jump in at $6.

Today, the stock soared $7.45 – as the Dow dove 200 – on positive Credit Suisse comments that Macau traffic trends are improving.

Those July calls traded as high as $7.79 on the day. If you bought in, consider selling to close to secure the gain.

 

Kohl’s Corporation (KSS)

Jun 03, 2015

My girlfriend Laurie and I were discussing trends in retail. As soon as she mentioned the recent downfall in Kohl’s, I had to dig a bit deeper. After the discovery, I think she’s a keeper.

Kohl’s took it on the chin, gapping down big after missing sales growth estimates. But if my pivot points are correct – and I’m betting big they are – KSS is in store for a move higher. I’d love to see a bearish gap refill on KSS to at least $72 from $66.

As you can see on this chart, RSI is oversold. MACD is on the floor. MFI is just beginning to reverse well off lows, too. Strongly believing KSS is overdue for a bounce here, consider buying to open the KSS July 2015 65 all up to $2.50.

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.

 

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