Invest and Trade Profitably with Jon Johnson

Weekender for 7/31

1. Market Summary

Cognitive Dissonance, But Who Cares?

– Even with some big-name earnings misses and a second negative GDP print, stocks rally.
– Missing is good, negative GDP is not really negative. Hello? “1984”?
– Cognitive dissonance, but who cares?
– GDP in the red for a second straight month, but be comforted — the experts say this is not a recession.
– NASDAQ and NASDAQ 100 just an upside open away from the June highs.
– Some stocks up all week, others are just starting to make interesting breaks higher — possible possibilities..
– Stocks a bit extended on this move and a test could start at any point, though there were no significant cracks Thursday.
– PCE for June out premarket. It can help NASDAQ get to the June highs or it can splash some ice water on the post-FOMC move.

Facebook (NASDAQ: META) missed its results and guided lower, following Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) misses (though they promised “stuff is getting better” a la President Starkey in “The Postman”). GDP missed and posted its second negative quarter, putting the United States in a technical recession regardless of what this Administration says (Yellen, Jarred Bernstein, White House press secretary, Yellen, Biden). Doesn’t matter to buyers: the worse it is, the better it is.

NOTE: The figures and information above are from the 7/28 report.

Watch the Investment House Videos For This Week Here!

NOTE: The videos are from the 7/27 report.

2. Targets Hit

Exxon Mobil Corp. (NYSE: XOM): Big name oil stocks were some of the first in the group to reset some good patterns after the June to July selloff needed to consolidate the earlier gains. XOM showed the same action, but it was stronger than most, holding over the 180-day moving average (MA) in the first half of July, forming a short double bottom at the 180-day MA as part of a larger cup base.

XOM bounced up to the 50-day MA and paused. As it turned out, XOM formed an inverted head and shoulders as part of that cup base. We like playing an inverted head and shoulders off of the bottom of the right shoulder — if the pattern is solid and if the market is moving higher, there is no reason to wait to play this as the stock breaks higher.

That is exactly what we did. On 7/25, XOM made the break higher, moving back up through the 50-day exponential moving average. That was our entry signal and we issued a buy alert in Investment House Daily to pick up the September $87.50 call options. They were bidding at $4.75, and that is what we issued the alert to buy.

On Tuesday, XOM tossed back a gain that tested the 50-day simple moving average (SMA) on the high.  It held, however, and the next session closed just over the 50-day SMA. On Thursday, XOM moved higher on good volume. On Friday, XOM gapped upside on its results — good pattern, energy stocks rebounding, market moving up. In addition, XOM filled a downside gap from mid-June.

After that gap and rally, XOM started to soften some. With the gap fill, we decided to issue the alert to sell half of the position at $9.85, banking a 107% gain.

We also took gains in the following plays:

Blink Charging Co. (NASDAQ: BLNK): 11.3% gain in the stock, 53% gain in the options

Omeros Corporation (NASDAQ: OMER): 17.2% gain in the stock

Permian Basin Royalty Trust (NYSE: PBT):  We took half the 20.7% stock and half of the 78% option gain

Receive a risk-free trial to Investment House Daily and save 50% by clicking here now!

Chevron Corporation (NYSE: CVX): After the oil stock correction from roughly mid-June to mid-July, some patterns were setting up in the big names as well as some smaller issues. CVX caught our eye for Technical Trader in early July, as it was attempting a double bottom of sorts at the 200-day SMA.

That particular pattern did not take, but after dipping again into mid-July, CVX recovered and proceeded to set up something of an inverted head and shoulders. CVX broke higher through the 200-day SMA, then started to fade to test. Indeed, on 7/21, CVX tapped the 200-day SMA on the low then reversed upside.

That was our entry signal. We issued the alert to buy September $145 call options at $7.75, the ask price. CVX finished strong that session, down on the day but rallying to the close. CVX proceeded to work higher up the 10-day exponential moving average (EMA), moving through the 20-day EMA into this past Thursday, where it moved up to the 50-day EMA.

Earnings were due on Friday, and we liked the pattern and the prospects for big energy beats. CVX came through, gapping upside over both 50-day MAs.

CVX hit our target at a gap fill from a June downside gap. Even so, it looked as if it had a lot of momentum and more room to run. Accordingly, we issued a sell alert to sell half of the options at $16.25 for a gain of 105%.  Now, we will see if CVX can push this gain farther.

We also took gain in the following play:

Alphabet Inc Class A (NASDAQ: GOOGL): 25% gain in the options

Receive a risk-free trial to Technical Trader and save 50% by clicking here now!

Omeros Corporation (NASDAQ: OMER): Some nice short-term patterns are showing up in Rapid Profits Stock Trader as the stock market continues its climb off the June 2022 and bear market lows. As the patterns set up, we look for the best: great patterns, explosive potential, room to run. OMER filled the bill perfectly.

After a rally into early July off the June lows, OMER worked laterally as the 50-day MAs rose, forming a four-week triangle.  A week back the 50-day SMA made it up to OMER’s price — that often acts as the catalyst for the next move.

OMER traded at the 50-day for three sessions, then edged higher on 7/27. On 7/28, OMER broke higher and we issued the alert to buy at $4.32. Solid move on the session, closing the day at $4.47. On Friday, OMER was on the move again, rallying early to near $5, our target. OMER touched $5, backed off, tried again, backed off again. We issued the sell alert for $4.95, banking a solid 14.5% gain overnight.

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.

To receive a risk-free trial and save 50%, click here now!

3. Covered Call Options Play

Callon Petroleum Co. (NYSE: CPE) — Callon Petroleum Co. is currently trading at $44.90. The Aug. 19 $45 Calls (CPE20220819C00045000) are trading at $3.70. That provides a return of about 10% if CPE is above $45 by the expiration.

Learn more about our Covered Call Tables here!

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