1. Market Summary
Resilience Turns to Solid Breaks Higher
– Resilience turns to solid breaks higher.
– The view that the Fed will limit rate hikes to four 50-basis-point hikes and improving retail earnings helped to trigger a break higher.
– All indices but Nasdaq/Nasdaq100 move through the 20-day exponential moving average (EMA). Internals are mixed and less than inspiring.
– Oil is strong again, and retail and chip stocks chip in. The economic data continue lower as the fact that we are in a recession is repeatedly denied on the financial stations. This time, they say, it is different. Sure it is.
– There are lots of rebounds in broken patterns — can they wholly recover?
– There was a long weekend ahead, and stocks are in a solid short squeeze rebound.
The persistent bid that was not strong enough to bounce stocks but was enough to hold them above the prior May lows finally received the trigger to spring a bigger upside move. It was more a one-two trigger. The idea was gleaned from the Federal Open Market Committee’s (FOMC) view of percentage consumption expenditures (PCE) out to 2024 and some retail earnings that were far better than the prior results from Walmart, Target, Bed, Bath and Beyond et al.
NOTE: The figures and information above are from the 5/26 report.
NOTE: The videos are from the 5/25 report.
2. Targets Hit
Energy dominated the upside action, but as the new rally gelled, we saw growth stocks and tech stocks start moving. As a result, we were able to make some solid and rather fast money in Investment House Daily .
Albemarle Corporation (NYSE: ALB): 58% gain in the options.
EQT Corporation (NYSE: EQT): 13% gain in the stock, 60% gain in the options.
NXP Semiconductors NV (NASDAQ: NXPI): 36% gain in the options.
Patterson-UTI Energy, Inc. (NASDAQ: PTEN): 14% gain in the stock, 68% gain in the options.
Southwestern Energy Company (NYSE: SWN): 17.8% gain in the stock, 69% gain in the options.
W&T Offshore, Inc. (NYSE: WTI): 18.9% gain in the stock, 45% gain in the options.
We entered some plays in Technical Traders Alert with the rebound starting to take shape.
On Thursday, we saw the Lam Research Corporation (NASDAQ: LRCX) break higher over the resistance of the 50-day moving average (MA) after stopping the bleeding lower over the past six weeks via a lateral move and forming a base.
When it made the break higher on Thursday, we issued an alert to buy the July $500 calls for $33.77. On Friday, LRCX gapped upside, as the renewed interest in tech continued. It gapped right into some resistance, however. We checked the options, and they were showing a 30% gain — excellent upside in this market in such a short period. As a result, we opted to take half the position. So, we issued an alert to sell half of the options for $45.97 and banked a solid 35% gain.
We also banked gain in the following positions:
Marathon Oil Corporation (NYSE: MRO): 38% gain in the options
Suncor Energy Inc. (NYSE: SU): 47% gain in the options.
Energy stocks set up well and were popping the past week. Energy is not just oil, however. Lithium and other, related, stocks enjoyed gains as well. We took advantage of that with these trades in Rapid Profits Stock Trader.
EQT Corporation (NYSE: EQT): 5.72% gain in the stock.
Marathon Oil Corporation (NYSE: MRO): 4.58% gain in the stock.
Southwestern Energy Company (NYSE: SWN): 10.64% gain in the stock.
W&T Offshore, Inc. (NYSE: WTI): 7.35% gain in the stock.
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.
3. Covered Call Options Play
Target Hospitality Corp. (NASDAQ: TH) — Target Hospitality Corp. is currently trading at $6.08. The June 17 $7.50 Calls (TH20220617C00007500) are trading at $0.05. That provides a return of about 29% if TH is above $7.50 by the expiration.