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Wynn Resorts (WYNN)

May 18, 2015

Wynn Resorts (WYNN) is 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.

Perhaps, though, the worst has been priced in, as options gamblers bet on near-term upside opportunity. We also have to consider the stock is at a 52-week low, finding double bottom support just under $107 a share with oversold reads on RSI, MACD and Money Flow.

While I’d use the technical reads to accumulate calls for a near-term move, I also suggest buying puts on any move higher. It doesn’t look like the downtrend has wrapped up.

At the moment, consider buying to open the WYNN July 2015 105 call up to $7. All we’re looking to do is capitalize on a dead cat bounce before opening a put.

 

 

3D Systems (DDD)

May 17, 2015

3-D printing stocks have fallen out of favor.

3D Systems (DDD) just fell to a 52-week low of $20.82, as an example.

But if history repeats itself – technically – the stock could see a respectable bounce off recent lows. Four of the last six times RSI dipped to its 30-line -- coupled with an MFI move to its 20-line, shares of DDD have bounced.

The stock is now at similar lows again now. Even Williams % Range is stuck at -100. This – in my opinion – cannot last much longer.

The bears are crowding the short side of the trade. It’s only a matter of time before we see a move higher in such an oversold stock.

Considering companies are printing everything from toys and shoes to jewelry, guitars... and even guns, there’s a lot to get excited about.

  • A Belgian team of engineers produced a 3-D printed car called the Aerion that could go from 0 to 62 mph in 3.2 seconds with a top speed of 88 mph.
  • In January 2012, a French model maker created the very first life sized robot that can be 3D printed.
  • A Chinese company can print 10 one-story buildings in a single day.
  • Fashion designers are experimenting with 3D printing when it comes to fashion with hats and dress, shoes and jewelry.
  • Car manufacturers are using 3D printing for concept cars.
  • Folks are even 3D printing food.
  • Jay Leno recently used a 3-D printer for a rare part he needed for a vintage motorcycle.
  • Engineer Michael Guslick claimed that he printed and fired the world’s first homemade
  • In September 2014, the Space X Dragon Ship carried the first operating 3D printer to the International Space Station so astronauts can print tools for missions, according to CBS News. 

While the adoption of 3D printing is accelerating, related stocks are still stuck in a sustainable downtrend. But we can’t ignore the high likelihood of a near-term bounce, given massively oversold technical reads.

Without risking too much, I’d consider two ways to trade this.

One, buy just the underlying stock up to $22 a share with a firm -25% stop loss.

And, or two buy to open a long-dated DDD January 2016 22 call up to $2.80.

Avon (AVP): The Great Cyber Hoax

May 15, 2015

And boom goes the dynamite…

Avon (AVP) shareholders got the gift of a lifetime on news that London-based PTG Capital bid $18.75 a share – three times yesterday’s closing price.

The stock soared as high as $8.02 on the news.

Shareholders were thrilled to say the least.

Only problem is the news is a hoax.  Yep, new shareholders are now bag holders it would seem.  Not only did Avon not receive a buyout offer, no one can confirm the existence of PTG Capital so far.

If this is the case and an electronic filing made its way through the SEC site, this could very well be another issue of cyber security issues that needs immediate attention.

With the stock likely to pull back, short the stock at current prices, or buy to open the June 2015 7 put.

Microsoft (MSFT)

May 14, 2015

I worry about analysts.

Deutsche Bank just upgraded Microsoft from a Buy to a Hold with a $55 price target.  They believe a weak PC market is already priced in, and that investor enthusiasm is returning over Azure and Office 365.  I have yet to see or hear any one enthusiastic about a soft PC market, though.

Deutsche also believes the stock reflects discount…. You know, as the stock challenges an all-time high at double top resistance. 

How do I get a job as an overpaid analyst without a clue?


Here’s what aggravates me about the “enthusiasm.”

Intel just announced that it expects the PC market to remain challenging this year with mid-single digit declines in the overall market. 

The only thing I’m enthusiastic about here is how much we can make from MSFT downside.  Not only is MSFT challenging double top resistance points, RSI is pivoting from overbought levels above its 70-line.  Money Flow has already reversed off its highs at 80-line.  And MACD hasn’t been this high in years.

The best way to profit from MSFT is by buying to open the MSFT July 2015 48 put.

Best wishes… Ian

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