1. Market Summary
Excerpted from Thursday’s paid content of Investment House Daily by Jon Johnson.
The Market Handles Some Economic Figures That Miss Once More
– The market handles some economics figures that miss again, as well as some earnings misfires.
– Chips, mid-cap stocks and small-cap stocks take their turn at the lead.
– Facebook’s results crack the mega-cap stocks’ armor, and then Amazon’s afterhours miss sends Nasdaq futures lower.
– As mega-cap stocks struggle, perhaps the smaller stocks will lead once more.
When we looked at the session overall — including the afterhours — it did not look that good, at least for the chip stocks. However, smaller-cap issues picked up the slack.
The number of people on government assistance has climbed back over 13 million.
These reports, on top of diminished confidence from many measurements, all indicated a weaker manufacturing sector. Of course, you can tie it all to supply lines, but it is what it is. Whether containers are stuck in ports (Houston is the latest incident in the United States) or food is being burned up or flooded out ( America’s produce market is getting scorched and swine herds in China have drowned), supply issues are hitting all areas of the market.
P.S. Las Vegas Money Show, September 12-14, Bally’s Hotel & Resort: Join me and many other speakers. For more information, go to Johnson.MoneyShow.com. A special registration code of 053412 is embedded in the link to help my readers secure early-bird pricing and a seat at the event.
NOTE: The figures and information above are from the 7/29 report.
NOTE: The videos are from the 7/28 report.
2. Targets Hit
Here are four completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:
Facebook, Inc. (NASDAQ: FB): Earnings were coming, and FB was testing the 50-day moving average (MA) after the mid-July sharp selloff rattled the markets. Regardless of the selling reverberations, this was a classic setup for FB just before earnings.
The pullback to key support put FB in position for a tailor-made pre-earnings run. When FB showed a doji at the 50-day MA, we put it on the report.
During the next session, FB started up off of the 50-day MA. That was our entry signal. We picked up the September $345 call options for $16.65 when the stock was trading at $345.54.
It was indeed a classic run. FB rose steadily from the 50-day MA and gapped higher after Snap Inc.’s earnings report came out. We let FB ride higher into its own earnings report and took gains on July 28. Just before FB published its results we sold our options for $36.35 and banked a nice 118% profit.
We also took gain this past week in the following positions:
Microsoft Corporation (NASDAQ: MSFT): We bought September $275 calls on July 13 and sold them on July 26 for a 54% gain.
Cloudflare Inc. (NYSE: NET): We bought September $105 call options on July 20 and sold them on July 29 for an 80.7% gain.
Visa Inc. (NYSE: V): We bought September $240 calls on July 14 and sold them on July 27 for a 42% gain.
Here are three completed trades from Technical Trader Alert, offering insights into our trading strategy and the targets that we have hit this week:
Albemarle Corporation (NYSE: ALB): When you mention the name Albermarle, no one knows anything about it. When you say the ticker ALB, no one knows it either. That is okay. Enough of the big money managers know about it. So do we.
Thus, when we saw ALB setting up again for a new move higher, we were interested. ALB had formed a textbook cup base in January and rallied nicely in April. After ALB formed a handle to its cup during the first half of July, the stock started higher off of the 50-day MA.
When it broke higher on July 20, we entered the play and bought September $185 for $11.10. ALB stepped higher during that session and continued upside a day later. After a lateral test, the stock started this week with a gain. On Wednesday, ALB started higher again. It then surged to a new all-time high on Thursday.
ALB hit our initial target during the early part of session and paused. However, we stuck to the plan and sold half of the options for $21 and banked an 89% gain. After that pause, ALB continued to move and eventually surged to $211.
Okay, a good move had turned very good. We sold another half of the options for $27.50 and banked a 147% gain. The rest of our options are still working, as the stock is still moving higher.
We took gain in the following positions as well:
Atlassian Corporation PLC (NASDAQ: TEAM): We bought September $270 options on July 20 and sold them on July 30 for $67.50. This allowed us to bank a 309% gain.
Roku Inc. (NASDAQ: ROKU): We sold our September $430 call options for a 56% and a 117% gain.
There were no new trades in the Success Trading Group this week.
Still, 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.
3. Pick of the Week
CRWD (CrowdStrike Holdings — $263.58, +5.74)
STATUS: CRWD broke out from a six-month trading range during the fourth week of June. It then struggled to move higher. While it achieved this goal in early July, the stock fell during the mid-July selling.
CRWD recovered due the surge over the past week. It is now testing back to the 20-day exponential moving average (EMA) after reaching a new all-time high. It held the 20-day EMA on the Tuesday low and rebounded Wednesday.
Since the breakout has held, we are ready to move into CRWD as it breaks higher once more. A move to the target will give us a 60% gain in the options.
VOLUME: 9.378M Avg Volume: 8.71M
ENTRY POINT: $$264.94 Volume=5M Target=$289.97 Stop=$256.61
POSITION: CRWD OCT 15 2021 270.00 Calls — (50 delta)
4. Covered Call Options Play
Marathon Patent Group Inc. (NASDAQ: MARA) — Marathon Patent Group Inc. is currently trading at $27.48. The August 20 $28 Calls (MARA20210820C00028000) are trading at $3.05. That provides a return of about 15% if MARA is above $28 by the expiration.