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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

Cree Inc. (CREE)

May 21, 2015

Cree Inc. has always been a favorite for years.

Ever since President Bush inked an 822-page energy measure in December 2007, I’ve been a fan of the stock, jumping in and out on the LED growth story.

That measure included a future ban on 100-watt incandescent bulbs by 2012. It paved the way for bulbs that use 25% to 30% less energy, lopping an estimated $18 billion off annual U.S. electric bills, and cutting consumer electricity usage by 60%.

The move to LED lighting has been astonishing. In fact, the LED market is expected to reach $5.2 billion this year alone.

But that’s not what’s drawing me to the chart eight years after finding the stock. Not at all… The technical pattern is what has me excited.

Take a look.

CREE just found solid support going back to late 2014. MACD and RSI beginning to bottom out and reverse. And Money Flow is showing a positive shift to the upside, telling me money is beginning to flow back into the name.

CREE is a longer-term opportunity. With this trade, I’d consider a long-dated call or even a LEAPS trade. For our purposes, consider buying to open the CREE December 2015 32.50 call up to $3.

 

 

iShares NASDAQ Biotechnology Index (IBB)

May 19, 2015

Seven years ago, I issued my most profitable trade of the last 16 years.

I recommended that readers consider taking a position in the iShares NASDAQ Biotechnology Index (IBB) at just $80 a share.

Today, the ETF is challenging all-time highs of $360 a share.

That’s a gain of 350% without doing a thing but pay attention.

 

I knew that 10,000 boomers would retire by the day for the next 20 years. I also knew they would control $1 trillion of disposable income, demand greater health care, and spend on products that would keep them going another few years. And that’s exactly what happened.

Baby boomers created one of the most profitable 20-year trends that changed just about everything. “You’d have to be an idiot to turn your back on this humongous growth market,” said Jody Holtzman, head of the AARP’s Thought Leadership unit.

  • GNC Holdings said that baby boomers are one of its biggest buyers of its products for high blood pressure, digestion, eye and brain health, and muscle and bone density.
  • The market for skin care and anti-aging products is expected to balloon from around $80 billion today to more than $114 billion by 2015, according to Global Industry.
  • Companies and clinics are promoting hormone replacement drugs as a way to slow the aging process, too. Some cost as much as $15,000 a year. In 2011, consumers spent $1.6 billion on prescription testosterone therapies, almost triple the amount spent in 2006.

Is the run over?

Has the momentum run its course?

According to the fools, biotech is in a bubble. But it’s not. Biotech is not in a bubble… not with a sustainable 20-year trend, booming biotech advancements, and affordable care for millions that had no care to start with.

I can’t help but thank the biotech bears, though.

Every time they argue for downside, the IBB re-challenges its 50-day (and 200-day) moving averages before setting new highs. When – and if – the IBB fails at triple top resistance, which it could easily do, the bears will jump, call for a bubble, and set the IBB up for another respectable run to higher highs.

Wait for a pullback before buying the IBB and/or call options.

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.

 

 

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