1. Market Summary
Excerpted from Wednesday’s paid content of Investment House Daily due to the Christmas holiday.
The Rebound Rally Continues
– The rebound rally continues for a second session, with nice low-to-high action.
– Gross domestic product (GDP) edges higher.
– Consumer confidence moves higher, and while existing home sales are lower, they are still rising.
– The S&P 500 is already closing in on the top of the range in the rebound’s first key test.
The rebound rally toward Christmas continued on Wednesday, and there were slower (but still solid) advances across the board in the stock indices. We also saw a stronger GDP revision, very decent consumer sentiment as ‘holiday hope’ continued to rise and disappointing existing home sales. In sum, this was good enough to keep the rally moving — or, at least, to not hurt it.
NOTE: The figures and information above are from the 12/22 report.
NOTE: The videos are from the 12/22 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:
Micron Technology, Inc. (NASDAQ: MU): MU definitely took a circuitous route to achieve profitability, but it did profit nonetheless.
After a test of its late November breakout, which took MU to a higher recovery high, MU was set to bounce again, having come back to near the 200-day simple moving average (SMA) and the prior high. We saw all of this, and we were ready. On Dec. 6, MU started higher off of the 200-day SMA. As a result, we issued the alert to buy February $82.50 call options for $6.85.
During the next session, MU gapped higher with a strong move. The game was on. MU moved a bit more during the next session and then took a pause. This was not an issue, as it was holding the 10-day exponential moving average (EMA) support.
MU gapped upside on Dec. 13 but reversed during that session. Then, it spent the next five sessions bouncing up and down and backsliding to support at the bottom of its Nov.-Dec. range. Was it a pre-Christmas Grinch?
Dec. 12 brought good tidings: an upgrade. MU gapped out of its trading range with a powerful move. It paused, and then rallied again on Dec. 23. At this point, it hit the initial target.
We issued the alert to sell half the position for $12.10 in order to bank a solid 75% gain.
Here are two completed trades from the Success Trading Group, offering insights into our trading strategy and the targets that we have hit this week:
Century Aluminum Co. (NASDAQ: CENX): Since Alcoa Corp. (NYSE: AA) was showing relative strength, that had us looking at other aluminum stocks with good patterns, better pricing and more leverage. CENX fit that description with its three-month triangle, and we were on top of it.
Sure enough, on Dec. 21, CENX gapped higher out of the triangle. This was the signal that we were looking for, and we issued the alert to buy the stock for $14.75. CENX continued surging during the session and hit our initial target. We issued the alert to take half of the gain by selling half of the stock for $15.39. This produced a solid 4.3% gain. Nice!
During the next session, CENX surged again and came out of the gate in a strong position. When it started to stall, we issued an alert to sell the rest of the position for $16.08. This produced a 9% gain.
We also took a gain in the following position:
Silicon Motion Technology Corp. (NASDAQ: SIMO): The 7.15% stock gain was taken on Dec. 21.
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
Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) — Dave & Buster’s Entertainment Inc. is currently trading at $38.57. The Jan. 21 $39 Calls (PLAY20220121C00039000) are trading at $2.34. That provides a return of about 8% if PLAY is above $39 by the expiration.