Invest and Trade Profitably with Jon Johnson

Weekender for 12/12

1. Market Summary

Excerpted from Thursday’s paid content of Investment House Daily.

Chips Drop Harder

– The big-cap NYSE stocks are fine, but growth stocks took a beating.
– Chips drop harder, even as some big names still look very good.
– Jobless claims fall to five-decade lows, but…
– The rotation attempt stalls out as the Russell 2000 (RUT) flops. Yet, there are still very good setups in many sectors.
– Worries regarding the Consumer Price Index (CPI) impacted growth stocks on Thursday. On Friday, we saw if they were founded in reality. We also saw if the market really cared.

On Thursday, a pause turned into a drop that was a bit deeper. Initially, only growth stocks were modestly struggling. This was more likely a sign of a lack of bids than a lack of sellers. Futures were lower across the board. Initial jobless claims hit a 52-year low, and futures bounced for the next hour into the open.

This was interesting, given that one of the “reasons” for the weakness when the market closed on Thursday were fears that the Fed would taper faster and thus hike interest rates faster. If that worried investors, it would seem that the tightest jobless claims report in over a half-century would have caused futures to drop, not rally. Oh yes, I am playing “find a reason why stocks sold” once again.

NOTE: The figures and information above are from the 12/9 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 12/8 report.

2. Targets Hit

Here is one completed trade from Investment House Daily, offering insights into our trading strategy and the target that we have hit this week:

NXP Semiconductors NV (NASDAQ: NXPI): Chips had led the prior rally higher, and we were watching for them to do the same after the pullback and consolidation in the middle of November.

We saw NXPI setting up a really nice pennant consolidation over the 10-day exponential moving average (EMA) and put it on the report. We were ready to buy when NXPI made its move. On Nov. 22, NXPI did break higher, and we moved in — it’s just that NXPI needed another few sessions to finish.

We issued the alert to buy the January $220 call options for $14. NXPI proceeded to fade into Nov. 26 and gapped to a hammer doji at the 50-day EMA. NXPI gapped right back up from that test, however, and rallied beyond our entry point. It was not straight up from there, as the market was turning volatile, but NXPI trended higher up the 20-day EMA into December.

On Tuesday, Dec. 7, NXPI gapped higher, moved to near $240 and hit our target. So, we issued the alert to sell the options for $22.55 and bank a 61% gain. NXPI then faded to test the 20-day EMA yet again, and we are watching for the next break higher to initiate a new play.

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Here are two completed trades from Technical Trader Alert, offering insights into our trading strategy and the targets that we have hit this week:

Apple Inc. (NASDAQ: AAPL): Guess what? We returned to AAPL again this past week. We saw AAPL testing back to the 20-day EMA from its last rally and were looking to play the next leg higher. After gapping down to the 20-day EMA and then stalling on a bounce, AAPL broke higher on Dec. 6. That was the signal we were watching for. Indeed, we used it to move in and buy February $160 call options for $9.50. After that, it was pretty easy. We just watched AAPL move higher and took the gains.

AAPL hit the initial target when it put in its fourth nice move in five sessions. So, we issued the alert to sell half the position for $18.65 and bank a 96% gain. However, AAPL was not done, and it continued higher into Thursday.

After a move higher, AAPL started to stall. After several sessions higher, and the CPI due out on Friday, we issued another alert to sell another half of the options $20.45 and bank a 115% gain. From here, we will see how AAPL performs and let the last part run as far as AAPL will take it.

We also banked a gain in the following position:

Atlassian Corporation PLC (NASDAQ: TEAM): We took the last of the 146% gain in the put options.

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Here is one completed trade from the Success Trading Group, offering insights into our trading strategy and the target that we have hit this week:

Louisiana-Pacific Corporation (NYSE: LPX): Materials have remained relatively hot, and a steady performer is the lumber company LPX. It tested the 50-day moving average (MA) and bounced from it.

One of those tests occurred in early December, as LPX faded to test yet another run to a higher high. It hesitated during the first day it bounced and faded back to a modest gain. Then, it was back up. On Nov. 6, we issued an entry alert to buy LPX for $71.40.

During the next session, LPX gapped higher and rallied to close at $74.27. One day later, LPX gapped higher again, advanced modestly from there and then started to stall. Since it had produced a good run off of the 50-day MA, we issued the alert to sell the stock for $74.93 and bank an easy 4.9% gain.

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.

To receive a risk-free trial and save 50%, click here now!

3. Covered Call Options Play

Full House Resorts Inc. (NASDAQ: FLL) — Full House Resorts Inc. is currently trading at $11.45. The Jan. 21 $12.50 Calls (FLL20220121C00012500) are trading at $0.55. That provides a return of about 17% if FLL is above $12.50 by the expiration.

Learn more about our Covered Call Tables here!

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