Weekender for 12/11
1. Market Summary
Indices Bounce as Anticipated
- Indices bounce as anticipated, some good, some so-so
- The PHLX Semiconductor Sector (SOX) shows solid action while NYSE indices are lackluster
- Saudi Arabia and China turn chummy even as Saudi brokers U.S./Russia prisoner exchange.
- Producer Price Index (PPI), Michigan sentiment on Friday provide next pricing/inflation data, but next week’s Consumer Price Index, Federal Open Market Rate Committee (FOMC) rate decision have the final say.
Well, that was not much of a rebound move, at least outside of SOX. SOX managed to bounce back up to midrange, closing just over the 10-day exponential moving average (EMA). That still leaves SOX below the 200-day simple moving average (SMA), but it did recover into the four-week range. That gives it a shot to make the break higher.
NOTE: The figures and information above are from the 12/8 report.
Watch the Investment House Videos For This Week Here!
NOTE: The videos are from the 12/7 report.
2. Targets Hit
This was a week that saw the indices testing the post-Powell, next 50 base-point hike spike, indeed, giving up that surge. We knew it was likely not a rollover move, so we were managing some positions in Investment House Daily as some areas remained strong while others suffered some rotation to other areas. In that environment, we took the following gains:
Steel Dynamics, Inc. (NASDAQ: STLD): 54% gain in the options
Vale SA (NYSE: VALE): 14.8% gain in the stock, 94% gain in the options
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While techs are finally trying to make a break higher, with semiconductors setting up some good patterns, this market is still led by the more industrial side from manufacturing, energy, minerals and industrial metals. Even precious metals are showing some life.
Even so, leaders go through rounds of consolidation or even more if rotation takes hold. Oil and gas stocks are seeing that, and manufacturing/machinery may be ready to follow them. Even so, metals remain, for now, solid. Given a climate where the established leaders are starting to struggle, however, we like to take advantage of good moves in stocks in those sectors for Technical Trader Alert.
Thus, when Nucor Corporation (NYSE: NUE) posted some good surges but was unable to hold them this week, we opted to take some more gain on that position. We have already banked some nice gain on NUE, but when it spiked Wednesday and again started to peel back, we issued the alert to bank another half of the position for a 66% gain. f the stock can successfully finish the test of the 10-day EMA and post a new break higher, we will look to start a new position.
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3. Covered Call Options Play
Victoria’s Secret & Co. (NYSE: VSCO) — Victoria’s Secret & Co. is currently trading at $43.05. The Dec. 16 $45 Calls (VSCO20221216C00045000) are trading at $2.70. That provides a return of about 12% if VSCO is above $45 by the expiration.
