Weekender for 4/2
1. Market Summary
The Upside Continues
- The upside continues for the large-cap indices with gaps to doji
- Big Nadsaq names and precious metals continue their strange relationship
- Market ignores a plethora of negatives because… the Fed is back to the liquidity supplier of last resort
- Banks are reporting bank run phase two is on, and bank patterns show they are not so “sound and resilient”
- Small-caps whispering in the market’s ear: all glory is fleeting — especially when the news is this bad
- Still looking at specific upside, as some really nice downside setups emerge once again
On Wednesday night, I posited there no longer were real markets where price is ascertained by buyers and sellers gleaning knowledge and placing their orders. The Fed has expanded its powers, the Treasury as well, to the point the Fed is the designated market backstop. As soon as trouble started, the Fed ratcheted down its inflation fight and backdoored a reinflation of its balance sheet.
NOTE: The figures and information above are from the 3/30 report.
Watch the Investment House Videos For This Week Here!
NOTE: The videos are from the 3/29 report.
2. Targets Hit
Investment House Daily:
Rambus Inc. (NASDAQ: RMBS): RMBS is a perennial winner in the chip sector, and when we saw it setting up from February into March, using the 50-day moving average (MA) as support, we were ready to move in when RMBS started to break higher from that pattern. Indeed, the pattern formed a shallow inverted head and shoulders with two shallow dips bracketing a middle deeper dip. The Japanese from several hundred years back called this the “three rivers” pattern.
We saw RMBS bumping up at the top of its pattern mid-March. It slid laterally a couple of days then broke higher on March 21. That was our entry signal, and we issued the alert to enter the play with August $45 call options trading on the ask at $5.40. RMBS closed higher that session and then … moved laterally for four sessions, dipping Tuesday this week to the 50-day simple moving average (SMA).
That was just a test to rattle and shake out some holders. It worked. The next session RMBS started higher then surged on tremendous volume. Nice, strong breakout. Thursday, another strong move, +5.9% on even stronger volume. That move took RMBS to our initial target.
Playing our plan, we issued the alert to sell half the position with the options bidding $8.39 and a 55% gain. The rest we left on the table, as this is a strong breakout and we could get a double on this one with another sharp session or two upside.
We also took gain on the following position:
Fastly Inc. (NYSE: FSLY): 13.35% gain in the stock, 45% gain in the options
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Rapid Profits Stock Trader:
As usual, we were patrolling the market for stock patterns in the right sectors (e.g. precious metals, defensive health care), patterns ready to “turn the corner” as we like to say in the Rapid Profits world.
One we had on the list was Omeros Corporation (NASDAQ: OMER), a stock we have played to our advantage before. OMER gapped over the 200-day SMA in early February, altering the stock’s character after a multi-month decline. After that move, OMER drifted higher for a few sessions and then started to test. We put it on the list and watched for the setup.
It took quite a while — to late March. But it was a constructive period, with OMER falling to the merged 50-day MAs and the 200-day SMA. After working laterally almost five weeks, with a volatile few days here and there, OMER started to move up from that convergence of support. We saw it start to bounce on Friday, March 24, so we were ready on Monday if OMER continued the move.
It did. On Monday OMER broke higher, and we issued the alert to enter with the stock trading at $3.99 on the ask. The timing was excellent. OMER finished higher that session. Then, on Tuesday, OMER added some more upside. Thursday OMER shot higher, hitting our target. We issued the alert to sell with the stock trading at $4.39 on the bid, a solid 10% gain. Next session OMER gapped slightly higher and reversed — we will see if it can give us a new entry after a short pullback and we can run the play again.
Now is a good time to become a member of Rapid Profits Stock Trader. 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
Beazer Homes Usa Inc. (NYSE: BZH) — Beazer Homes Usa Inc. is currently trading at $14.78. The May 19 $15 Calls (BZH20230519C00015000) are trading at $0.95. That provides a return of about 9% if BZH is above $15 by the expiration.
