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Chart of Day: Bristol Myers Likely to Push Higher

Apr 24, 2017

The last time we played Bristol Myers (BMY), we picked up the June 55 put and walked with gains of 49% and 39%. The time before that we picked up the March 49 calls and walked with gains of 104% and 135%. Not bad at all…

Now, though, we have another opportunity to make more money from BMY on the long side. After pulling back from $57.50 to $53, BMY has again become oversold on our momentum metrics, including RSI, MACD and Money Flow after finding solid support at current prices. What we’d now like to see is a potential retest of triple top resistance at $57.50 again, near-term.

There are two ways to trade the opportunity.  One, buy to open the BMY June 2017 52.50 call at market prices. And, or two buy to open the BMY June 2017 55 call at market prices as well.

Chart of Day: Ross Stores Begins to Bounce

Apr 20, 2017

As we noted on the evening of April 9, 2017:

Of all of the struggling retailers, the one that should be fine is Ross Stores (ROST). But what’s piquing my interest in ROST isn’t just how fundamentally undervalued it’s become, it’s how technically oversold it is at its 200-day moving average. First, we can see just how oversold ROST is on relative strength, MACD and Williams’ %R, but also take a look at the history of the stock at its 200-day. Since the start of 2016, each time the stock dips even slightly below that average, it snaps back not long after, especially between June and July 2016.

All of those indicators combined leads me to believe ROST is now overdue for a move higher. And we’re recommending two ways to trade the opportunity.  One, consider buying to open the ROST May 2017 62.50 call at market. And, or two buy to open the May 65 call at market as well. Both should do well.

In fact, after testing the other side of its 200-day moving average, the stock did exactly what we had hoped it would do. It bounced on oversold RSI, MACD, and Williams’ %R. The stock last traded at $64.66 and it’s still running.

We’d like to see if run back to $66.33 before we close the options trades.

Since April 10, the ROST May 62.50 calls have run from $2.50 to $3.05. The ROST May 65 calls have run from $1.15 to $1.55. Not bad so far. Hold both.

Chart of Day: Palo Alto (PANW) becomes a Steal

Apr 17, 2017

Over the last several years, we’ve had our legs cut out from under us.

Consumers have had their most private information exposed.

Their credit cards, social security numbers, even their bank account information has been exposed for the world to see. Even the FDA once warned that medical devices and the technology behind them do not offer enough cyber security.

In fact, according to the FDA in early 2017, vulnerabilities in pacemakers and insulin pumps can be manipulated to cause lethal attacks. St. Jude Medical was even warned that its devices were vulnerable to cyber attacks that could allow third parties to control them.

In 2016, more than 50% of Americans were hacked and they don’t even know about it. Attackers weren’t just stealing your information. They were changing it. Consumer devices were being held for ransom. Imagine turning on your smart phone only to find out that criminals are running code on your device.

As the threat gets worse, we begin to look at severely beaten-down stocks like Palo Alto Networks (PANW), which just caught double bottom support with oversold reads on RSI, MACD, and Money Flow.

 

Chart of Day: The Dollar’s Falling Wedge

Apr 15, 2017

There are two things likely to take the US dollar back below 100.46.

For one, it’s finding significant resistance points once we draw our trend lines. Here you can see that it’s falling and flailing in a falling wedge pattern. Until it breaks above 101, the pattern could persist for some time.

The other reason for weakness is new comments from Donald Trump that the currency is far too strong. “I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me,” he said. “But that’s hurting – that will hurt ultimately.”

As long as the dollar moves lower it’s great news for gold. At the same time, we are looking for a potential bounce in gold once it tests the bottom of the falling wedge. Be sure to keep an eye on it, too for potential opportunity.

Happy Passover and Easter.  We wish you all the very best.

 

Chart of Day: It’s time to take the Win on CSIQ

Apr 11, 2017

On March 29, we recommended buying the CSIQ stock (at $11.60) and the May 12 calls (at 80 cents) because the stock had become so severely oversold. It’s a good thing we did. We would have missed the run that followed. As of Monday, the stock was up to $13.16. The May 12 call was up to $1.70. Those aren’t bad gains at all for a few weeks. Take both off the table, as the stock becomes overbought. We’ll jump back in on a pullback.

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