Invest and Trade Profitably with Jon Johnson

Weekender for 12/19

1. Market Summary

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

Housing Starts Surge

– Wednesday’s growth buy was sold on Thursday.
– Housing starts surge, but the Philly Fed falls. Production moves higher, but Markit Purchasing Managers’ Index (PMI) moves lower.
– Indices hold the recent lows and are at a mightily thin positive position.
– A definite defensive flavor has come back.
– This Friday was expiration Friday. Then, the market will show us if a Santa rally can come before 2022 arrives.

Thursday started as an extension of the Wednesday post-Federal Open Market Committee (FOMC) rally. This was just what we wanted to see, i.e., a lack of a pause and the appearance of a continuation move. While an early dip was bought out and looked positive, the indices then rolled over and sold off into the penultimate hour of trading. There was a modest bounce in the last hour, but some of it was given back. The day also featured a weak close for all stocks, particularly growth ones, though the DJ30 showed relative strength.

NOTE: The figures and information above are from the 12/16 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 12/15 report.

2. Targets Hit

Here are two completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:

Fluor Corp. (NYSE: FLR): The quieter side of the market, the industrial side, was putting in a rather unnoticed rally. All attention was, as usual, focused on the big tech stocks, chips and growth stocks. Even so, FLR and other such stocks moved steadily higher. In mid-November, FLR was testing its break higher and was trading around the 10-day exponential moving average (EMA).

After a three-session fade to the 10-day EMA, we saw FLR gap below it. The stock then held the low of the prior test. We put it on the report, and when FLR gapped back over the 10-day EMA, that was our signal to enter.

We bought January $22.50 call options for $2.05. FLR rallied nicely for a few sessions, and then the market hit some selling. As a result, FLR gapped to the 20-day EMA. It held and came off of the intraday lows. As a result, there was no reason to exit.

FLR consolidated at the 20-day EMA for a week and then started moving up again, rising along the 10-day EMA. On Dec. 14, FLR gapped higher with the market and surged upside.

Then, the market started to reverse, and FLR started to balk. So, we issued an alert to sell half of the position for $3.65 in order to bank a 78% gain. FLR is currently testing the 10-day EMA, and we anticipate that it will put in another rally off of the near support it is using to trend higher.

We also took a gain the following position:

F5 Inc. (NASDAQ: FFIV): We took the rest of the 82% gain in the December options.

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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:

Amgen, Inc. (NASDAQ: AMGN): We watched AMGN with interest in late November and early December, as it tested the October low and showed both higher moving average convergence/divergence (MACD) and other indications which revealed that selling momentum was dissipating.

After a long selloff that suggested a possible double bottom, we decided to sit and watch. Sure enough, AMGN rallied off of that second bottom. The problem was that we just watched. Okay, AMGN would have to test its break upside through the 50-day moving average (MA). This time, we watched and had a play ready to go if it set up.

This past week, AMGN used the overall market weakness to test that break higher. On Monday, it came back to the 50-day EMA to test. It also showed a nice doji at that level. Since it edged higher on Tuesday, we put the play on the report. On Wednesday, it broke higher from the 50-day EMA.

As a result, we issued a buy alert to purchase the April $210 call options for $14.50. The 200-day simple moving average (SMA) was in sight, and with other price resistance at that point present from back in August, it made for a good first target.

It did not take long for AMGN to make that run. After entering the play just after noon on Dec. 15, AMGN rallied nicely to close at the session high. During the next session, AMGN picked up where it left off. It steadily surged in the first hour and hit the 200-day SMA just after 10:00 a.m. Then, it stopped moving higher. So, we issued the sell alert to take profits at $23.50. That move generated a quick 62% gain, after which AMGN retraced the rally by nine points during the same session.

We also took a gain in the following position:

Apple Inc. (NASDAQ: AAPL): We took the rest of the 80% gain on the AAPL calls.

Receive a risk-free trial to Technical Trader and save 50% by clicking here now!

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:

Photronics, Inc. (NASDAQ: PLAB): PLAB put in a strong breakaway gap to the upside on Dec. 8, and when we see those types of moves, we watch the stock for an opportunity to play it when it tests that move. In the market selling that followed the Dec. 8 surge, PLAB did just that. In fact, it tested back to the 10-day EMA in a four-session fade.

On Tuesday, PLAB opened lower for a fourth session, but then the stock reversed for a modest gain. That put PLAB on the radar. During the next session, PLAB started upside again. That was our signal to buy the stock fpr $16.66.

PLAB blasted higher during that session and hit our initial target. So, we issued an alert to sell half of the position for $17.53 and bank a 5.2% gain.

During the next session, PLAB started higher again. Then, however, the bids from Wednesday died across the market. Since PLAB started to fade, we issued an alert to sell the rest of the position for $17.66 in order to bank a 6.0% 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

Amphastar Pharmaceuticals Inc. (NASDAQ: AMPH) — Amphastar Pharmaceuticals Inc. is currently trading at $21.67. The Jan. 21 $22.50 Calls (AMPH20220121C00022500) are trading at $0.90. That provides a return of about 12% if AMPH is above $22.50 by the expiration.

Learn more about our Covered Call Tables here!

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