Invest and Trade Profitably with Jon Johnson

Trade News Still Moving the Market

THE WEEKEND ISSUE

Informing Investors Around The World

Read In All 50 States And Over 100 Countries

Weekend Newsletter for

May 26, 2019

Table Of Contents 1) MARKET SUMMARY from THE DAILY 2) STOCK SPLIT REPORT 3) IH ALERTS 4) SUCCESS TRADING GROUP 5) COVERED CALL SERVICE

Jon Johnson

1) MARKET SUMMARY > >From “The Daily” by Jon Johnson at InvestmentHouse.com

After the Thursday gap lower on the indices, stocks were just oversold.

– Stocks bounce ahead of 3-day weekend, but the advance is modest and not everyone participated.
-Trade news still moving the market, but investors are going to get their heads around the issue.
-Economic data struggles as durables orders flop in April.
-Indices do the minimum, i.e. holding the range, but the overall patterns remain downside bias.

Market Summary (continued)
After the Thursday gap lower on the indices, stocks were just oversold, and ahead of a 3-day weekend we anticipated stocks would attempt a bounce. Sure enough, futures were up, rather modestly compared to the recent downside, and the session ended mixed with so-so gains. Not much in terms of upside as the bounce lacked sizzle, and indeed SOX and NASDAQ 100 closed lower. NASDAQ itself lost 56 points from the intraday high, closing up just 9 points. Any early buys were tossed aside as no one wanted to stick out their necks or any other appendages ahead of the long weekend.
SP500 3.82, 0.14%
NASDAQ 8.73, 0.11%
DJ30 95.22, 0.37%
SP400 0.50%
RUTX 0.85%
SOX -0.82%
NASDAQ 100 -0.10%
VOLUME: NYSE -25%, NASDAQ -24%. Oh yes, volume throttled way back on an upside session. Sure, the Friday before Memorial Day played its role, but the only way the market could rise was when most were not involved.
ADVANCE/DECLINE: NYSE 2.1:1, NASDAQ 1.9:1. Even breadth was anemic, particularly juxtaposed to the downside sessions (Thursday A/D was -3.4:1 and -3.8:1, respectively).
As a result, the relative condition of the stock indices changed not at all, i.e. still overall bias negative. The large cap indices show double tops with more recent head and shoulders patterns – kind of bearish on bearish patterns. At least they are holding onto some support near their highs; SOX tumbled 300 points and gave up the breakout, falling to the bottom of the 2018 trading range that held through September.
I suppose one can say that at least the indices managed to bounce at this next support. You can say that. Not much more to say regarding their patterns.

Read “The Daily” Entire Weekend Summary
Watch Market Overview Video
Watch Technical Summary Video
Watch Next Session Video

Here’s a trade from “The Daily” and insights into our trading strategy:

Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.

Downside and upside targets on the week show the market is still at a bifurcated direction before it chooses its main trend – a high probability it could be downside given the big double tops in the indices.
AVGO (Broadcom, Inc.)
Company Profile
Entered AVGO downside on 5/16. The stock made us great upside money but double topped late April/early May. It fell to the 50 day EMA but could not hold it, gapping lower, then recovering that level. We were ready for the drop as it tried a recovery but stalled. When it broke back below the 50 day MA we moved in with August $300 strike put options for $23.20. Pricey, but a $300+ stock with a long way to fall. AVGO did that, dropping with a series of gaps lower to fill the early March gap. We took some gain on 5/20 as it filled the gap, selling puts for $39.00 and banking 67%. We kept half the position and it continued lower, falling to the 200 day SMA Thursday. That was good enough for us; we sold the rest of the position for $47.50, banking just over 100%.

SWKS (Skyworks Solutions, Inc.)
Company Profile
Another chip stock in trouble with its ties to AAPL and China. We moved in on 5/16 as well as SWKS broke lower once more after a short test of its prior gap below the 200 day SMA. We bought some July $77.50 strike put options for $6.80. It was a quick tumble for SWKS as it often is when the selling starts. Monday it gapped to a doji at our target. We sold for $11.80, banking over 70%.

COUP (Coupa Software Incorporated )
Company Profile
Software is a leadership group and COUP has made us money several times. In early May we saw it test a breakout from a 3-month range, and moved in on 5/3 when COUP started higher. Picked up stock for $104.77 and June $105.00 strike calls for $7.80. COUP then proceeded to test the move, falling to the top of the trading range. It held and finally started back upside 5/15. Rallied nicely into Wednesday, hitting a new high and our initial target. Started to falter from the high so we sold half the stock for $113.58 (8+%) and half the options for $12.00 (53%). COUP tested to end the week but looks good – have to watch the software stocks as they are a bit volatile right now.

VMW (VMware, Inc.)
Company Profile
Volatility is why we took the gain on VMW. We initially moved in on 4/1 with stock and July $180 strike options for $183.63 and $14.3, respectively. Excellent rallies higher and we banked some gain in late April. VMW tested that move and we held the remaining half. It then surged into mid-May, hitting a new high. Looked great. Then it got choppy. Gapped lower Monday, immediately recovering into Wednesday, looking solid. Then Thursday another drop to Monday levels. Too much volatility. Sold the rest of the stock for $198.65 (8%) and the options for $23.20 (62%).

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2) STOCK SPLIT REPORT Here’s a leader play and our current analysis.

Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.

ARNA (Arena Pharmaceuticals–$53.41; +0.20; optionable): Biotech
Company Profile
EARNINGS: 08/07/2019
STATUS: ARNA broke out from a 10 week double bottom with handle mid-May, then spent last week testing that move. Low volume fade to the 10 day EMA and the prior high from March that started the base. Interestingly, over the past 12 months ARNA formed a double bottom with handle, the recent 10 week base being the handle. And, if you look farther back at a weekly chart you see a very large, 5 year inverted head and shoulders. For what that is worth. In any event, a strong breakout in the first half of May, now testing and giving us an entry opportunity. Unlike say the semiconductors that put in new highs on lower volume and fading MACD, volume surged for ARNA and MACD broke to a higher high with the price – now slowing momentum. This test is presenting a great entry for us. We want to play the break higher from this test as our entry signal. A move to the target gains 70%ish on the call options, 14%ish on the stock. Nice.
CHART VIDEO
Volume: 485.581K Avg Volume: 555.55K
BUY POINT: $54.04 Volume=725K Target=$61.54 Stop=$51.54
POSITION: ARNA AUG 16 2019 55.00 C – (50 delta) &/or Stock

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Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.

3) IH ALERTSACN (Accenture–$178.81; +0.53; optionable): software
Company Profile
EARNINGS: 06/27/2019
STATUS: Double top. IN the software group and performing well into late April, putting in a new high. As ACN put in that high, volume did not follow. MACD failed to follow through with a higher high as well. As is often the case when this happens, the volume came in on the downside when CAN gapped lower in early May. Fell to the 50 day MA, recovered into Wednesday but below the recent highs. Volume dried up as it tried higher last week, and it started to sag. It looks as if the momentum has run out and we want to move in on the downside if CAN makes a sharp break lower. There is a gap from late March to fill, and a move to that target gains 65+% on the put options.
CHART VIDEO
Volume: 1.278M Avg Volume: 1.688M
BUY POINT: $177.34 Volume=2M Target=$167.02 Stop=$180.67
POSITION: ACN AUG 16 2019 175.00P – (-37 DELTA)

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Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.

4) SUCCESS TRADING GROUP–by the MarketFN STG Team
CL (Colgate-Palmolive Company) Company ProfileOur Success Trading Group will be watching closely for entry points next week on some of our favorite stocks. We currently like Colgate-Palmolive Company (Ticker: CL) at its current price for new positions.

Our Success Trading Group closed7 years with 0 losses on our Main Trade Table. In fact, we closed 100% winning trades for the calendar years 2016, 2015, 2013, 2012, 2011, 2010 and 2009. All of these trades are posted on our Main Trade Table for your review during your free membership trial period.
Get Our Next Trade Free – Save $50 per month! Details Here.

Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.

5) COVERED CALL PLAYBRKS – Brooks Automation Inc. is currently trading at $35.22. The July $35.00 Calls (BRKS20190720C00035000) are trading at $2.20. That provides a return of about 6% if BRKS is above $35.00 on expiration Friday in July.

Company Profile

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