Invest and Trade Profitably with Jon Johnson

Weekender for 4/24

1. Market Summary

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

Existing Home Sales Fall

– Stocks get over Netflix’s huge subscriber miss, and rally… somewhat.
– Existing home sales fall, the average house price hits an all-time high and inventories are at a two-month level.
– The beige book sees demand destruction and slowing wages. Oh, that sounds positive!
– The Nasdaq big names are very weak, as many growth stocks bounced but showed poor action at resistance levels on Wednesday.
– Upside and downside trends remain in place, and some downside stocks are setting up again. Meanwhile, new stocks are trying to turn and trend higher. The market is still in a transition period, with the bulls and bears fighting to determine the next move.

The market may have had thoughts about a breakout from the large-cap inverted head-and-shoulders patterns. Early on, it looked as if they might pull it off. Futures were up, and earnings were well-received once again. Then, there was the repeat of the Wednesday action, except this time, all indices participated from the get-go. In short, they gapped higher and then sold off. It was not just growth stocks (read tech) that suffered, but some metals (precious and industrial), oil and energy stocks also felt the burn. Food and discount retail held up quite well, but they had little company. Most everything else got the blowtorch.

NOTE: The figures and information above are from the 4/21 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 4/20 report.

2. Targets Hit

There was a bit of back and forth in the market with some upside working well in trends and some downside working well in trends. This week, we banked some downside gains in Investment House Daily. Later in the week, we moved into more downside positions, as the Nasdaq broke lower from its attempted consolidation range.

Skyworks Solutions Inc. (NASDAQ: SWKS): Sold our put options for a 100% gain.

Micron Technology, Inc. (NASDAQ: MU): Sold our put options for a 45.8% gain.

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Even with the market chop and some downside bias, we played some upside in Technical Trader Alert as well. This enabled us to bank some good gains. Certain sectors are trending higher, some are trending lower and  others are just bouncing around with each headline. We were able to put this action to good use once again and scored some nice gains in both directions.

Masco Corp.(NYSE: MAS): 82% gain in the put options, which was our last part of this downside play.

Patterson-UTI Energy, Inc. (NASDAQ: PTEN): 132% gain in the call options, which marks our second gain in this position.

Ross Stores, Inc. (NASDAQ: ROST): 108% gain in the call options over 10 sessions.

Steel Dynamics, Inc. (NASDAQ: STLD): 142% gain in the call options over 11 sessions.

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There was one trade in the Success Trading Group this week.

Energy Transfer LP Unit (NYSE: ET): This was a good sector, a great setup and a nice trade. ET was not phoning home, but it was testing a nice breakout in early April. After a late March break higher and rally, a stock will test its near support. If all remains according to the status quo, the stock will bounce up from that support and start its next run.

Indeed, after its breakout run, ET faded to the 10-day exponential moving average (EMA) on the close, tapped the 20-day EMA on the intraday lows and rebounded. ET tested along the 10- and 20-day EMA for four sessions and then broke higher. Since that was the move we were waiting for, we issued an alert to buy the stock for $11.28.

ET held its move during that session, and it gapped higher during the following one. That started a steady, if unspectacular, move up the 10-day EMA. On Thursday, ET gapped upside to our target.

Since we saw the market indicating that it was going to reverse, we issued the alert to sell the stock for $11.99. That banked a nice, solid 6.29% gain in less than seven sessions. That works.

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

Sensus Healthcare Inc. (NASDAQ: SRTS) — Sensus Healthcare Inc. is currently trading at $8.51. The May 17 $10 Calls (SRTS20220517C00010000) are trading at $0.50. That provides a return of about 26% if SRTS is above $10 by the expiration.

Learn more about our Covered Call Tables here!

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