Real Life Trading Fall Portfolio 2016: Second Edition
By Jerremy Newsome, RealLifeTrading.com
If you look at this wager I made a few months ago, I was anticipating the move we've been getting in the markets. As the wager stands, I was about 16 hours too late on my prediction, meaning I will have to get that mohawk. Haha, but hey, that's fine. I don't have a boss that can fire me.
It makes sense that the market is selling off a bit into the new presidential election (especially after the 8 year term) and seasonally, Oct is a pretty weak month anyway, especially for oil and energy.
I am expecting a 'Santa Rally'. Perhaps some strong buying will come into the markets. Only time will tell, but my plan and goal will be looking to buy the dip. In fact, I already have this put sale analysis because I would not be afraid to own shares of the SPY down at those support levels. I'm still in the camp that the markets as a whole make higher highs in 2017.
Going forward, how will we trade it? Well, we looked at 5 stocks 1 month ago in our Fall Portfolio 2016: First Edition. As a reminder, these are not 'blind buy' recommendations. These are simply 5 stocks we as a collective unit will look at often and trade, regardless if it's up, down, sideways, with shares or with options. We can do it all and that's exciting!
Now, I plan to update my analysis on those stocks and see if we can find some solid and fun trade set ups!
#1 Micron Technology: MU
Let's just get it finished out the gate, here's what my chart looks like on MU.
Unless something wild happens, our Nov wk 1 put sale should expire worthless, tomorrow on November 4th, 2016. And, I'll plan on doing another one. Likely the $15 put sale expiring November 18th, 2016. I am bullish on MU, more bullish to neutral, though, since the 100 SMA on a weekly (the blue line on the chart) will be a wildly strong resistance. On the hourly chart, I have a few traders keeping a close eye on the bullish bounce on the short term time frames. This absolutely makes sense, especially if you're a more active trader. I love the trend on MU and I'm all about buying the bounce on this beast.
So far, we've been tracking very well on MU. Excited to see what it does. I love this tech stock!
MU PRICE FROM THE FIRST ARTICLE: DOWN $.99 [5.6%]
#2 LINE corporation: LN
Since we looked at it last, this social media company and new tech stock has been doing it's best 'rock in water impersonation'.
What's my analysis from here? Well, it's hard not to spot a pretty solid little double bottom on AG right now, on a great support. And the 11/3/16 candle sure does look like the retest of the neck line of this double bottom. Meaning? Well, from here, it's hard to make a case to not be bullish. Granted, earnings is right around the corner, although I don't anticipate a wild move on this stock over earnings. It's always possible, however the historical gaps on earnings don't really support a huge gap in price in either direction.
Regardless, if you want to trade this dainty little cookie, just keep a 100% growth in this stock as it's hitting $16 (which it was at mere months ago). Sure, it could take the better part of 4-5 months. And that's why patience is king in trading!
AG price from the first article: Up $.47 [5.7%]
#4 Bristol Myers Squibb: BMY
Alright! What a wild little vixen this stock has been the last few weeks. Wow! I am still kind of shocked that this stock has gotten beat up so badly these last few months. It's down over 30% in just 5 months time. That's pretty brutal for this blue chip pharm company. BMY reported pretty okay earnings and the stock responded nicely with a gorgeous gap on 10/27/16. I personally thought this gap was insanely bullish and I was watching every day for a strong continuation.
My thoughts from here is BMY heads just a bit lower then. I really didn't expect this gap to fill, but since it is, undoubtedly the bulls will give up and the stock probably heads into its great wall of support at $47. Now granted, the trade set up below is pretty aggressive. One could do it with shares or options.
The goal is to short with the trend until a strong support, where the short sellers might finally look to buy to close and perhaps some bullish traders come in at that price for the long haul. We will see. Perhaps BMY faces even more of an onslaught depending on who gets elected into office in the near term.
BMY will be and has been a fun stock to keep our eye on. Let's continue to do so!
BMY PRICE FROM THE FIRST ARTICLE: DOWN $4.45 [8.14%]
#5 Apple Inc: APPL
Good ol' AAPL. It's not a stock review without her making an appearance, right? Another slightly weird performance on AAPL in the last few days. AAPL comes out with amazing earnings numbers and gaps down large. The gap that occurred on earnings was certainly a bearish gap and go. Without question. And 'go' she went. As soon as AAPL broke the low of the 10/26 candle, it's been a nice and quick sell season for many traders.
Hey, that's okay! Many traders who are in shares sold a November $130 covered call on AAPL (which certainly will expire worthless) and many others like Al, Justin, Stephen and James bought short term puts as AAPL has been breaking down.
Now what? As it turns out, I'm still bullish on AAPL long term. I feel this selling is traders simply locking in a profit. Especially those who bought back in June at $92, like Mr. Buffett. Therefore at this time, I'm waiting on the bounce location. I'm planning around $108.77, to be exact. If this level holds, the outlook on AAPL is still pretty solid for the next 6-7 months. If it doesn't hold however... plan B will be to simply wait a few weeks to see what kind of signals it gives me. I like the fibs on it and I like the wave structure.
Excited to see what happens from here!
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