1. Market Summary
Excerpted from Thursday’s paid content of Investment House Daily.
A Mixed Start and a Mixed Finish
– We saw a mixed start and a mixed finish, but stock leaders flipped from the premarket to the regular session.
– Small-cap growth stocks and chips have posted gains, while the DJ30 faded modestly. Some tech areas, such as software, look oversold for now.
– Old school and industrial stocks are still looking good. Thus, we were wondering if the jobs report would have a positive or a negative effect.
– We are looking to pick up the good, old-school setups if they make the moves.
The DJ30 joined the other indices, dropping by half of a percent and giving up all the 2022 gains thus far. Is this a case of easy come, easy go? Well, the DJ30 did hold up well, as did many of the “old school” sectors. Even some of the growth stocks that were being pounded did a good job of holding their support and bouncing somewhat — though some could only hang on. Others fell further. The situation was definitely mixed, as was the market closing, but there were no outsized gains. The PHLX Semiconductor Sector INDEX (SOX) reached lower and rebounded to positive. This was a good move, but it was less than definitive when we consider the recent failures to hold good moves.
NOTE: The figures and information above are from the 1/6 report.
NOTE: The videos are from the 1/5 report.
2. Targets Hit
Here are four completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:
Caterpillar Inc. (NYSE: CAT): 74% gain in the options.
Micron Technology, Inc. (NASDAQ: MU): 129.9% gain in the options.
Procter & Gamble Co. (NYSE: PG): 34% gain in the options.
Photronics, Inc. (NASDAQ: PLAB): 18.4% gain in the stock, 84% gain in the options.
Here are five completed trades from Technical Trader Alert, offering insights into our trading strategy and the targets that we have hit this week:
Adobe Inc. (NASDAQ: ADBE): As the expression goes, “when the market gives you lemons…” Software was one of the first groups to start struggling as the market weakness emerged. Indeed, stocks like ADBE gapped sharply lower from relatively decent patterns in mid-December. Now, when a stock makes a big break lower or higher, that is something we can play off of. As I call it, this is something that allows us to counterpunch. Basically, it is a chance to make money.
Thus, we watched ADBE claw its way back up to the 200-day simple moving average (SMA), as it gapped below that big drop. We knew that a stock will typically fight its way back to either the lower gap point or some other key resistance. In this case, there were two such places: the gap point and the 200-day SMA. Both of them combined to form a nice double layer of ice that ADBE would have to break through to continue upside. We put the play on the report and started watching for a stall at that resistance.
On Dec. 28, ADBE gapped up to the 200-day SMA and touched that level for the first time on the recovery. At that point, however, ADBE stalled and started to roll over. That is exactly what we were looking for. We issued the alert to buy February $570 put options (the stock was at $570.64) for $24.80.
ADBE continued lower during that session and closed near the session low. Over the course of the following week, ADBE made a slow fall below the 10-day exponential moving average (EMA), bumped on the highs intraday and then faded away.
With the 10-day EMA acting as resistance, ADBE slid methodically lower. On Jan. 5, ADBE received a downgrade. As a result, the stock gapped lower to our target. So, we issued an alert to sell half of the puts for $50, banking a 101% gain.
Then, we waited to see if ADBE would finish the job and fall to support from way back in May 2021. During the next session, ADBE did that and gapped lower. While it gapped lower, it also held on and started to move up. As a result, we issued an alert to sell the rest of the position for $56, generating a 125.8% gain.
We also took gains in the following positions this week:
Freeport-McMoRan Inc. (NYSE: FCX): 59.3% gain in the options.
Halliburton Company (NYSE: HAL): 56% gain in the options.
Microchip Technology Inc. (NASDAQ: MCHP): 20.8% gain in the options.
J M Smucker Co. (NYSE: SJM): 33% 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:
Halliburton Company (NYSE: HAL): When the time is right, oil gushes. We saw the patterns setting up and wanted to participate in the next oil boom — okay, oil rally. HAL is both loved and despised. You know what? I don’t care.
From late October to early December, it set up a money-making pattern in the form of a double-bottom-with-handle pattern. Thus, if it made the move, we would make our move. This happened on Dec. 3. HAL broke upside over the 50-day SMA and moved out of that handle. Since that was our entry signal, we issued the alert to buy the stock for $24.04.
During the next session, HAL gapped upside, rallied and then started to stall. Since this sharp move had hit our target, we issued the alert to sell the stock for $25.24 in order to bank a 4.99% gain.
We also took gains this week in the following positions:
Genesis Energy, L.P. (NYSE: GEL): 5.11% gain in the stock.
Kosmos Energy Ltd. (NYSE: KOS): 9.14% gain in the stock.
Kroger Co. (NYSE: KR): 4.08% 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
Goodyear Tire & Rubber Co. (NASDAQ: GT) — Goodyear Tire & Rubber Co. is currently trading at $22.35. The Feb. 18 $23 Calls (GT20220200C00023000) are trading at $1.25. That provides a return of about 9% if GT is above $23 by the expiration.