Invest and Trade Profitably with Jon Johnson

Investment House Weekend Wrap Up

Current Hotline

Weekender for 2/18/2024

1. Market Summary

  • Third rally leg continues despite weaker data, sentiment calling the move overdone
  • Technical action overrules data
  • Initial claims, of course, fade, but regional Purchasing Managers Indexes (PMIs) continue their weak performance, industrial production/utilization fall, retail sales show the typical first of year weakness
  • Commercial real estate (CRE) is no real worry to the Fed, just to those who cannot make the payments and the banks holding the paper
  • Small and mid-caps lead the rally higher for a second day as the market seeks new leaders
  • More stocks moving up, a few more leadership possibles
  • February expiration, Friday, but still early enough in the third leg to consider entering new breaks higher

For a second straight session Goldman Sachs (GS) struck a pessimistic tone, stating a “breather is warranted, likely.” Strong statement, maybe. That was not enough, however, as a GS traders later stated the market action is “rhyming with 2021 peak euphoria.” No doubt the market appears to fear little. For a second session, stocks rallied. The leadership mix changed a bit, but the mid-caps and small-caps again led the action, and led with a comfortable margin.

NOTE: The figures and facts above are from the 2/15 report.

MARKET VIDEO

NOTE: The videos are from the 2/14 report.

2. Targets Hit

Investment House Daily:

As the second leg of the 2024 rally started to fade and then dropped abruptly, only to immediately bounce off the 20-day exponential moving average (EMA) into leg three, we found tons of opportunities. More than that, it was opportunity from many sectors. That is a positive for the market, but it could still use more leadership from stocks other than the mega-cap Nasdaq leaders. In any event, we banked some great gains as the below trades show.

ProShares Bitcoin Strategy ETF (NYSEARCA: BITO): 13% gain in the stock, 68% gain in the options

HF Sinclair Corp. (NYSE: DINO): 133% in the options

Microsoft Corp. (NASDAQ: MSFT): 187.9% gain in the options

Nu Holdings Ltd. (NYSE: NU): 10.45% gain in the stock, 85.7% gain in the options

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Technical Trader:

We have hit the big names in leading sectors hard, and that has profited us handsomely.  This past week it was retail and software with some of those big names scoring nice gains.

Costco Wholesale Corporation (NASDAQ: COST): 50% gain in the options

Synopsys Inc. (NASDAQ: SNPS): 77% gain in the options

Ulta Beauty Inc. (NASDAQ: ULTA): 83.8% gain in the options

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Rapid Profits Stock Trader:

Finance, pharma and biotechs were the foundation of this week’s gains. As the mega-cap techs were slowing their last run, some other areas seemingly long forgotten started to stir. Oil and gas for one, and a group of drugs, pharma and biotech.  It made for ripe opportunities to make some rapid profits on stocks that were in excellent position to move … and did.

Fate Therapeutics Inc. (NASDAQ: FATE): 7.38% gain in the stock in less than three sessions

Nu Holdings Ltd. (NYSE: NU): A finance stock, but it worked well, giving us a 7.54% gain in a short trade

Nano Labs Ltd. (NASDAQ: NA):  Sometimes things fall into place. After a gap lower to start February, NA moved laterally after that gap, refusing to sell further. It exploded higher Monday, Feb. 12, filling the gap, breaking the 200-day simple moving average (SMA), and surpassing the December 2023 highs. We were watching and cashed out with a 44.9% gain as the stock shot higher then started to backtrack in a hurry.

Omeros Corp. (NASDAQ: OMER): We saw OMER with a beautiful setup to break higher through the 200-day SMA after a bump of that resistance off a higher low, a short fade, and then on Wednesday, a break through that resistance. We jumped on that breakout, and the following session, OMER hit our target and we banked a solid 10.4% gain in the stock.

Receive a risk-free trial to Rapid Profits Stock Trader and save 50% by clicking here now!

3. Covered Call Options Play

Applovin Corp. (NASDAQ: APP) — Applovin Corp. is currently trading at $46.87. The March 15 $47.50 calls (APP20240315C00047500) are currently trading at $4.40. That provides a return of about 12% if APP is above $47.50 by the expiration.

Learn more about our Covered Call Tables here!

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