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Chart of the Day: Disney Gives us 68% Gains in a Week

Nov 30, 2015

Well… that was easy.

On November 23, we recommended a buy on the DIS February 2016 115 put even with the Star Wars movie just weeks away.

We knew the stock was over-extended, challenging overhead double top resistance. We had to – at least – assume a healthy pullback was in store following that.

And that’s exactly what we got…

In the days that followed, DIS would pull back from the $119.42 high on November 23 to $113.91 today. That’s more than a $6 drop… And all we had to do was pay attention to our technical reads on momentum.

The February 2016 115 put [bought at $3.85] now trades at $6.45.

That’s a gain of 68% in days… Sell to close half. Hold the second half. We believe DIS could challenge its 50-day.

 

Chart of the Day: ACADIA Ready to Break Out...

Nov 25, 2015

It’s been one of the hottest biotech stocks of the last three years…

Since 2012, shares of ACADIA Pharmaceuticals (ACAD) have risen more than 4,000%...

No wonder the press believes biotech stocks are in a bubble.  But as much as the press wants investors to believe the biotech boom in such stocks has peaked, it’s just not true.

In fact, with the recent news out of the ACADIA camp, the boom has only just begun.

By May 1, 2016, the FDA will make its final decision on approving ACAD’s drug for the treatment of Parkinson’s disease Psychosis…

That’s exciting news...

An estimated 40% of patients with Parkinson’s disease develop PDP, often characterized by frightening hallucinations and delusions.  There are as many as a million people in the U.S. that suffer from Parkinson’s.    

Another four to six million worldwide suffer as well.

At the moment, the only drugs used to treat PDP come with side effects, such as worsening motor skills, further mental issues, and potential weight gains. None of them have ever been approved to address PDP, though.

But in Phase III trials, Nuplazid was found to produce significant anti-psychotic efficacy in primary goals. It also reached its secondary goals, as well, with good success in motoric tolerability.  The only side effects noted in the Phase III Nuplazid study were urinary tract infections, and falls.  

Buy shares of ACAD up to $40… and be patient.  As excitement heats up going into May, the sky's the limit.

 

Chart of the Day: Disney Challenging Highs…

Nov 23, 2015

In August 2015, we recommended a buy on Disney (DIS) and the DIS January 2016 115 calls, as they traded at $109.50 and $3.60, respectively. Today, as the stock over-extends, challenging the prior high of $122.08, it’s time to jump out of our initial trade recommendation.

The DIS stock last traded at $119.42 – a 9% gain. Take it.

The DIS January 2016 115 calls last traded at $6.55 for a gain of 82%. Take it.

As the stock begins to over-extend, we believe near-term upside is limited, even with the Star Wars movie coming out. We’re seeing overbought reads on most technical patterns, as well, leading us to believe we’ll see a quick sell-off shortly.

The best way to trade that potential move is by buying to open the DIS February 2016 115 put up to $4.40.

 

Chart of the Day: The Ferrari Flop

Nov 18, 2015

Weeks after advising investors to avoid the Ferrari stock, shares are down about 21% from its highs… with further downside ahead of it.

Unfortunately – as always – it’s the little guys that would up holding the bag at the end of the day with a company that’s not really looking to dramatically increase sales, limiting future growth… The overpriced, over-subscribed stock gave way to a sizeable drop, leaving many to ask why they bought in the first place.

Evercore analysts agree, initiating a sell rating with a $40 price target, noting that pricing power “is not as strong as some believe.”

Stay away from the stock… It’s another dud.

 

Chart of the Day: Exiting Exxon Mobil…

Nov 16, 2015

On November 4, we recommended two put options on Exxon Mobil. By November 12, we were out of half of each… Today, we’re recommending you sell to close the second halves.  Unbelievably, XOM has found some support at the 50-day, jumping $2.44 on the day.

We don’t expect the run to last long, though. Oil has not bottomed.

Once support gives, we’ll jump back into puts.

Anyway, there are better ways to make money at the moment. A severe overreaction in Clovis Oncology (CLVS) on delay news is a great buy opportunity, in our opinion. There are two ways to trade this opportunity long-term. One, buy just CLVS stock up to $30 a share… And, or two buy to open the January 2015 35 call at market.

 

 

 

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