1. Market Summary
Excerpted from Thursday’s paid content of Investment House Daily by Jon Johnson.
New High on the S&P 500
– We saw a new high on the S&P 500 and another on the S&P 400, as the DJ30 deals with International Business Machines Corp. (NYSE: IBM).
– There are some upside moves, but the internals are getting a bit sloppy after more than a week of gains.
– The market is focusing on earnings, as it should. Outside of earnings, there are continuing issues.
– Some areas are due for a test, but other areas look ready to come out of tests.
All indices resumed the upside. However, the DJ30 suffered an IBM (inevitably bad miss). IBM missed on earnings and dropped by 9.56%. With that collapse, the Dow had virtually no chance of pushing to a new closing high. No worries. The S&P 500 and S&P 400 managed new highs, while the other indices scored solid-to-decent gains.
Outside of IBM, the rest of the market performed admirably in an extension of this leg of the seasonal rally.
The other indices, well, outside of the Nasdaq 100 and perhaps the Nasdaq, do not look quite ready for new prime-time highs on this leg. That could change as some big name tech earnings are rolled out. However, if there are more after-hours revenue misses, such as what we saw with Intel Corporation (NASDAQ: INTC) and Snap Inc. (NYSE: SNAP), well, it might take a test for the Nasdaq to have a new run at those levels.
NOTE: The figures and information above are from the 10/21 report.
NOTE: The videos are from the 10/20 report.
2. Targets Hit
Here are two completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:
Advanced Micro Devices, Inc. (NASDAQ: AMD): We watched AMD from August into September. It was setting up a pattern, but it was taking its time to get there. We waited and waited — sometimes, you have to wait. Finally, on Oct. 13, AMD made a definitive move. It bounced from its support at $100 up to the 50-day simple moving average (SMA) and then slid laterally for three sessions — a nice, one-two-three test of a good move, which often leads to a new and bigger move.
That is exactly what happened. On Oct. 13, AMD made that move. So, we issued the alert to by December $110 call options for $6.85. From there, AMD made a steady climb into this week. Then, it underwent a big move, a pause and then another, stronger, move.
On Oct. 21, AMD approached the early August peak and touched our initial target. We issued the alert to take half of the gains, since the options were selling for $12.85. That returned a solid 87% gain.
Now, AMD will likely test for a few sessions once more. Then, we will see if it can break higher and through the early August high for a new strong leg and a triple-digit-percentage gain.
We also took a gain in the following position this week:
Kosmos Energy Ltd. (NYSE: KOS): 26% gain in the stock.
Here are several completed trades from Technical Trader Alert, offering insights into our trading strategy and the targets that we have hit this week:
Coinbase Global Inc. (NASDAQ: COIN): We saw COIN coming out of a pullback in early October, as it rallied back up through the 50-day moving average (MA). It worked laterally over the 50-day MA, and we put it on the report.
On Oct. 11, COIN started higher. So, we moved in and bought December $250 call options for $24.22. COIN was not quite ready, however, and faded during the next two sessions. However, it still held the 50-day exponential moving average (EMA). By doing so, COIN formed the right shoulder of a six-week, inverted head-and-shoulders pattern.
After that test, COIN started higher on Oct 14. A day later, COIN gapped and rallied up to our initial target. At this point, we banked half of the gains by selling half of the options for $40.55. This produced a 67% gain.
COIN continued higher during the next session, starting lower and then surging upside. It then continued higher and formed a loose doji. We issued the alert to sell another half of the position when the options were trading for $56. This produced a 131% gain.
COIN continued upside but then started started to falter after trying higher once again. We sold the rest of the position when the options were trading at $57.50. This produced a 137% gain.
We will let COIN consolidate the last run, and if it looks good for a new position after that, we will be ready to move in again.
We also banked gains in the following positions this week:
Halliburton Company (NYSE: HAL): 68% gain in the options.
Lowe’s Companies Inc. (NYSE: LOW): 55% and 92% gains in the options.
Netflix Inc. (NASDAQ: NFLX): 58% gain in the options.
SentinelOne Inc. (NYSE: S): 69% gain in the options.
Here are four completed trades from the Success Trading Group, offering insights into our trading strategy and the targets that we have hit this week:
Pan American Silver Corp. (NASDAQ: PAAS): Silver made a very important move in late September — it broke its key support. That was not the very important move, however. The very important move was the immediate reversal. The iShares Silver Trust (NYSEARCA: SLV) broke higher during the following session and recovered the support. From there, silver has continued to run.
We were looking at precious metals, and PAAS was making a turn as well. PAAS cleared the 50-day MA in mid-October and then worked laterally into this week. On Wednesday, it started higher. However, we were looking for a move up off of the 50-day MA.
Accordingly, we issued the alert to buy PAAS on Oct. 20. At that time, PAAS was trading at $25.88. The stock paused on Thursday, and then surged again on Friday. As that hit our initial target, we issued the alert to sell the stock for $26.96. That produced a nice 4.17% gain in short order.
We also locked in gains in the following positions:
Helmerich & Payne, Inc. (NYSE: HP): 4.97% gain in the stock.
HollyFrontier Corp. (NYSE: HFC): 3.98% gain in the stock.
Marvell Technology Inc. (NASDAQ: MRVL): 3.68% gain in the stock.
Now is a good time to become a member of the Success Trading Group. The system is geared towards bringing you consistent, short-term gains of 5-10% and you can expect four to six trades every month.
3. Covered Call Options Play
Aersale Corp. (NASDAQ: ASLE) — Aersale Corp. is currently trading at $19.31. The Nov. 19 $20 Calls (ASLE20211119C00020000) are trading at $1.05. That provides a return of about 11% if ASLE is above $20 by the expiration.