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Dow Jones Industrial Average (DJIA)

Jun 11, 2015

“The Dow tried to break well above 18,250 but failed at top of channel,” I noted on May 26, 2015. “Unless we see a strong, sustainable break above 18,200, which I didn’t think was likely, we could dive about 300 points lower, testing prior triple bottom support around 17,750.”

Weeks later, we hit a low of 17,714 after that call above. The poor bulls continued to chase the markets higher not realizing what our technical pivot points were telling us.

Am I telling you this to show off?

Well… maybe a little.

But I’m updating this call because I recommended a buy on the Pro Shares Ultra Short Dow 30 (DXD) up to $21 and/or the DXD October 2015 21 call up to $1.50.

The DXD ran from about $20 to $21.

The DXD October 21 calls ran from a low of about $1.15 to a high of $1.55 in no time at all.

If you were in and out of this trade – featured here absolutely free – congratulations on that.

Is the latest move off 17,750 lows sustainable? Perhaps… But just for the immediate-term on some of the oversold technical indicators on this chart.

The underlying economy is still very weak. There’s really nothing to get excited about… well, expect for these last few trades.

 

 

 

Microsoft Update (MSFT)

Jun 10, 2015

On May 14, Microsoft was upgraded to a buy with a $55 price target.

Only problem was the stock was challenging heavy double top resistance and a challenging PC market.

It’s why I recommended a buy on the MSFT July 2015 48 put, as it traded around $1.40. As expected, the stock did slip shortly after, sending our put to $2.25. I’m now recommending that you sell to close the position to secure the gain.

I’m beginning to see signs of reversal off recent lows at the moment. But I’d like to see confirmation of trend change before recommending a call option. Stay tuned for that.

 

McDonald’s Corporation (MCD)

Jun 09, 2015

McDonald’s just cannot catch a break…

Global same-store sales were down 0.3%, according to many reports. U.S. same-store sales were down 2.2% because of heavy competition from Chipotle, and Yum Brands, which carries Taco Bell and KFC.

The numbers out of MCD have been poor consistently. No wonder they’re halting the reports this July 1, 2015. That means we’ll only learn about same-store sales during earnings season rather than monthly.

Who needs transparency?

If MCD can’t turn things around, shareholders won’t be too happy moving forward.

If MCD breaks prior support just under $94, the stock could easily test $92… and then $88 worst case. Let’s hope for the best here, shall we?

Consider taking a small position in the MCD September 2015 95 put up to $4.80.

 

Under Armour (UA)

Jun 08, 2015

Shares of Under Armour picked up some much-needed attention, moving higher on a DA Davidson upgrade. The firm upgraded the stock from a neutral rating to a buy rating with a $91 price target, pointing to a potential move higher on earnings.

Traders are already betting on a higher move by month’s end, as 2,053 weekly 85 calls – expiring June 26 – were picked up on Friday. Fundamentally, the company is sound.  I'm willing to bet on further upside in the name.  If interested, consider buying to open the UA October 2015 82.50 call up to $5.10.   

 

 

Ambarella (AMBA)

Jun 05, 2015

It doesn’t take a rocket scientist to see what may come next here.

The semiconductor company may have run up big on earnings, but it managed to overshoot, in danger of correcting near-term. Not only is it sitting at its upper Bollinger Band (2,20) and giving us an overbought read on Williams % Range, look at how over-extended MACD, RSI and MFI are on this chart.

These are extreme reads. The stock is very likely to correct. Consider buying to open the AMBA August 2015 100 put up to $9.  The underlying stock could head much higher over the long-term. Near-term, though, it has to correct.  

 

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