Weekender For 3/27
1. Market Summary
Excerpted from Thursday’s paid content of Investment House Daily.
Big-Name Chips Surge
– After a tepid start, the PHLX Semiconductor Sector (SOX) took over. After the big-name chip stocks surged, the SOX blew through the 200-day simple moving average (SMA).
– “Careful optimism” regarding a ceasefire has been credited for the continued move, but durable goods are not doing so well.
– President Biden warns of “real” food shortages as the “price” for sanctioning Russia.
– The Chicago Board Options Exchange’s CBOE Volatility Index (VIX) is down and close to the 200-day SMA. It is also close to the point where it bounced after the last move higher. While the SOX’s move appears to confirm the upside in this rally, a bit of caution is warranted after a good move.
A tepid but upside start stumbled somewhat in the first hour of trading, but, as has been the case, the bids returned and stocks rallied into midday, slowed the pace and then surged upside into the close. While there were gains all around, the monster was SOX, as it posted a 5% move and broke above the 200-day SMA. Nvidia, Advanced Micro Devices and Intel were a few of the chip stocks that put in very strong moves. With that kind of leadership, SOX smashed the 200-day SMA, and in doing so, gave this rebound more credibility… at least for the day.
NOTE: The figures and information above are from the 3/24 report.
Watch the Investment House Videos For This Week Here!
NOTE: The videos are from the 3/23 report.
2. Targets Hit
There was one trade in Investment House Daily this week.
Olympic Steel, Inc. (NASDAQ: ZEUS): Zeus gave us a head fake, but a quality pattern won out. It broke out from a nice four-month-long double-bottom-with-handle pattern and made the breakout move in late February. ZEUS blew through the 200-day SMA on that move and then made the breakout test. This allowed it to come back to the 10-day exponential moving average (EMA).
On March 9, ZEUS started to bounce up from that 10-day EMA. A good base led to a good breakout and a good test. We issued an alert to buy the stock for $30.60, as well as July $30 call options for $5.20.
ZEUS bounced during the next session and was looking good. Then, it fell during the next session. Then, it reached down to the 20-day EMA. The stock bounced intraday, however, and showed a nice doji with tail. That candlestick indication often accompanies the end of a move, which was a short test in this case. Sure enough, ZEUS rebounded and proceeded to surge upside into this past week.
On March 22, ZEUS hit our initial target. So, we issued an alert to sell half of the stock for $36.08 and half of the options for $8.00. This produced gains of 17.9% and 53%, respectively.
ZEUS tested back to the 10-day EMA once again. Then, it started back upside on Thursday and Friday. This bodes well for the remaining half of the position.
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There were two trades in Technical Trader Alert this week.
United States Steel Corporation (NYSE: X): After a breakout from an inverted head-and-shoulders pattern in late February, X tested the move in the early part of March. It then faded back to the 10-day EMA from March 7 to March 8. On March 9, X made the bounce from the test. This was our entry signal. So, we issued an alert to buy May $30 call options for $4.05.
X proceeded to continue the rally, and it moved up as it made Darvis’ “little pyramids” above the 10-day EMA. On March 24, X surged to our initial target at the Fibonacci extension, and we issued an alert to sell half of the position for $8.10 in order to bank a 100% gain.
We also banked a gain in the following position:
Alcoa Corp. (NYSE: AA): 64.7% gain in the options.
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There were two trades in the Success Trading Group this week.
Blink Charging Co. (NASDAQ: BLNK): This was one of the stocks that was showing a recovery action and formed an inverted head-and-shoulders base from January into March — though March turned a bit volatile by the middle of the month. That volatility, however, provided a chance to move into a good pattern when BLNK rebounded from some quick selling.
On March 18, BLNK broke back over the 50-day EMA. That was our signal to enter. We issued the alert to enter at $25.42. BLNK moved up to near $25.61 during that session. During the next trading day, March 21, BLNK jumped higher and hit our target. We issued an alert to sell the position for $26.64 in order to generate a 4.8% gain. This was a nice, quick turn.
We also took a gain in the following position this week:
Fluor Corp. (NYSE: FLR): 4% 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.
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3. Covered Call Options Play
Centennial Resource Development (NASDAQ: CDEV) — Centennial Resource Development is currently trading at $8.23. The April 15 $9 Calls (CDEV20220515C00009000) are trading at $0.63. That provides a return of about 18% if CDEV is above $9 by the expiration.
