1. Market Summary
Excerpted from Wednesday’s paid content of Investment House Daily due to the New Year’s Day holiday.
A Pause Leads to Some Bids
– The pause on Tuesday has led to some bids, as the indices hold their positions.
– We are seeing darn solid action, constructive action, in many of the growth indices.
– Many quality stocks are testing. Will they rebound this week, or will we have to see if 2022 likes the patterns?
We saw some pretty solid action in the middle of the week. Stocks started lower and then made a comeback. We did not see a powerful move across all of the indices, but there was a low-to-high move on all of them. While there were no major gains for most stocks — even if some did move well — the action was constructive and left a positive setup for a move upside to the end of the week … and beyond? Well, the start of a new year is always a wildcard, and this setup does nothing more than indicate that the bids are still in the market and that a good setup to move higher into the weekend is in place.
NOTE: The figures and information above are from the 12/29 report.
NOTE: The videos are from the 12/29 report.
2. Targets Hit
Here are six completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:
Procter & Gamble Co. (NYSE: PG): Sometimes boring is good. In fact, boring is great if the market says that boring works. Take PG. We did. Toward the end of the year, the market was showing interest in some tech leaders, e.g. chips, but it was also losing some interest in other growth areas. At the same time, more defensive stocks, such as PG, perked up.
After a good run from early December, which was the breakout move from a base, PG tested toward the 10-day exponential moving average (EMA). We anticipated that the 10-day EMA would act as support after that good breakout. So, we put the stock on the report.
Sure enough, on Dec. 21, PG showed a doji at the 10-day EMA. On Dec. 22, it broke higher. That was our entry signal. We bought February $155 call options for $6.10.
PG stepped off of the 10-day moving average (MA) and moved higher into the week after Christmas. On Thursday, PG rallied again and then started to fade off of the high. After six (of seven) sessions upside and the fact that the stock reached a new high before fading, we issued an alert to sell half of the position for $10.70 in order to bank a solid 75% gain.
We also this week in the following positions took gains:
Applied Materials, Inc. (NASDAQ: AMAT): 34% gain in the options.
Meta Platforms Inc. (NASDAQ: FB): 54% gain in the options.
F5 Inc. (NASDAQ: FFIV): 56% gain in the options.
Micron Technology, Inc. (NASDAQ: MU): 91% in the options.
Photronics, Inc. (NASDAQ: PLAB): 14.9% gain in the stock, 70% gain in the options.
Here are four completed trades from Technical Trader Alert, offering insights into our trading strategy and the targets that we have hit this week:
Broadcom Inc. (NASDAQ: AVGO): AVGO set up a classic technical continuation trade after it gapped higher out of a six-week trading range. In general, a strong gap breakout on big volume typically leads to a continued move higher. When we saw AVGO working laterally after that gap and refusing to give up its gains, we put the play on the report and watched for the renewed break higher.
That move came when AVGO cleared the highs in its lateral consolidation. We issued an alert to enter the play by buying February $640 call options for $31.80.
AVGO did what we had anticipated. It nicely rose above the 10-day EMA as it continued the breakaway gap move. On Dec. 28, AVGO gapped higher and then started to fade the move. After five consecutive sessions higher, a gap-and-fade pattern signals that the run is going to take a breather.
Accordingly, we issued an alert to sell half of the position for $49.50 in order to bank a 55% gain. We are letting the rest of the position test to see if it can catch another bid for a new leg higher.
We also took gains in the following positions:
Advanced Micro Devices, Inc. (NASDAQ: AMD): 50.8% gain in the options.
Microchip Technology Inc. (NASDAQ: MCHP): 39% gain in the options.
Seagate Technology Holdings PLC (NASDAQ: STX): 78% gain in the options.
Here are three completed trades from the Success Trading Group, offering insights into our trading strategy and the targets that we have hit this week:
Freeport-McMoRan Inc. (NYSE: FCX): We watched FCX set up a new base off of its mid-November high. It took the shape of something like an inverted head-and-shoulders pattern by using the merged 50-day and 200-day MAs. On Dec. 20, FCX gapped to the 200-day MA. During the next session, FCX gapped up off of the 200-day MA and through the 50-day MA. That was our entry signal.
We issued an alert to buy the stock for $39.16. FCX rallied straight upside, and on Dec. 23, it hit the initial target. Since it was moving well, we issued an alert to sell half of the position for $40.89 in order to bank a 4.4% gain. On the Monday after Christmas, FCX continued higher for a fourth session.
As it then started to stall, we issued the alert to sell the remaining half for $41.74 in order to bank a 6.59% gain. After that, FCX stalled for a couple of sessions, but we anticipate moving in again after a test.
We also took gains in the following positions:
EQT Corporation (NYSE: EQT): 5.3% gain in the stock.
Marvell Technology Inc. (NASDAQ: MRVL): 4.53% 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
Ichor Holdings Ltd. (NASDAQ: ICHR) — Ichor Holdings Ltd. is currently trading at $46.18. The Jan. 21 $47.50 Calls (ICHR20220121C00047500) are trading at $1.45. That provides a return of about 8% if ICHR is above $47.50 by the expiration.