Invest and Trade Profitably with Jon Johnson

Weekender for 1/22

1. Market Summary

Another Session Lower

  • Another session lower as the indices start to tap support in the next big test.
  • As stocks fade off the rally peak, many of the “hard” sectors start to lead again.
  • Not all industrials perform: big manufacturing and equipment sell harder.
  • Expiration Friday could be interesting, but we still see some techs in very good position to go with the metals, materials, minerals.

The selling continued on Thursday, as stocks pull back from the resistance touched late last week. Thursday, the selling was focused more on the chips and tech stocks, the groups that mostly side-stepped the Wednesday downside. The “hard stuff” areas were lower, but their decline was more consolidation of the last move higher.  Many are now in very good positions to move higher, and even with the downside market Thursday, some posted gains as they have already tested and are starting to move again.

Many metals look very good, as other industrials, e.g. Ingersoll Rand Inc., Emerson Electric Co., Eaton Corporation PLC have been hammered lower.  Thus, the same themes remain, e.g. metals, materials, and minerals are setting up well again, while growth areas are in a reckoning right now. Indeed, the industrial-side leaders are narrowing as those mentioned above along with some related industrials sell back.

NOTE: The figures and information above are from the 1/19 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 1/18 report.

2. Targets Hit

Investment House Daily:

With the early 2023 rally, many boats are rising. The same stocks that led before are still performing, e.g. metals, oil and gas, but techs have rallied. Moreover, it is not just bounces from ugly selloffs; some groups are showing solid patterns, e.g. semiconductors.

Indeed, Rambus Inc. (NASDAQ: RMBS) is one of the stronger stocks, tech or not. While many such stocks sold off in late 2022, RMBS consolidated a rally with a 2-month tight, lateral move. When it started to bounce from the 50-day moving average (MA) at the bottom of the range, RMBS was signaling it was ready to rally anew.

When it broke higher on Jan. 9, we issued the alert to enter the play with May $35 call options asking $5.26.  RMBS held the gain that day and then proceeded to rally up the 10-day exponential moving average (EMA) into this week, surging nicely on Jan. 18. The next session, RMBS was softer as the market overall struggled.  After eight sessions higher and closing in on the 128% Fibonacci extension of the prior rally, we decided to bank some gains. We issued the alert to sell half the options that were bidding $7.50, banking a solid 42% gain.

We also took gain this week on the following positions:

McEwen Mining Inc. (NYSE: MUX): 23% gain in the stock

Oil States International, Inc. (NYSE: OIS): 21% gain in the stock

Terex Corporation (NYSE: TEX): 48% gain in the options

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Technical Trader Alert:

This early 2023 rally is a bit mixed but it is also inclusive, you could say. Energy, metals, minerals — the “hard” stocks — continue to perform. At the same time, retail is working and techs are improving their patterns as well.

We have positions in the leaders and are continuing to let them run, adding new ones at the right time. We also picked up others in retail and tech, and we are taking gains as they make their moves and start to peak.  Accordingly, this past week, in addition to initiating new plays, we took gain in the following:

Crocs, Inc. (NASDAQ: CROX): 130% gain in the options

Halliburton Company (NYSE: HAL): 42.5% gain in the options

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Rapid Profits Alert:

We continued looking at the basics the past week, e.g. metals, minerals — but we are open to other areas as they recover.  That keeps us very excited about the possibilities for 2023, though there may be some more downside first after this rally to start 2023 stalls.

This past week, we banked gains in a couple of basics — one in materials, one in precious metals. In Century Aluminum Co. (NASDAQ: CENX), we closed a trade with a 10.5% gain. The other was Coeur Mining Inc. (NYSE: CDE), a precious metals stock we picked up on Jan. 9 at $3.78.

CDE was rallying off of a test of the 50-day MA that formed a short handle to a cup with handle base that started in November. CDE jumped then faded to test, forming a second handle at the 20-day EMA. This week, CDE broke out again, surging Thursday and Friday, hitting our target. We issued the alert to sell with the stock bidding $4.15, a solid 9.5% gain.

Now is a good time to become a member of Rapid Profits Stock Trader. The system is geared towards bringing you consistent, short-term gains of 5-10% and you can expect four to six trades every month.

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3. Covered Call Options Play

Calix Inc. (NYSE: CALX) — Calix Inc. is currently trading at $57.36. The Feb. 17 $60 Calls (CALX20230217C00060000) are trading at $2.70. That provides a return of about 11% if CALX is above $60 by the expiration.

Learn more about our Covered Call Tables here!

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