Memorial Day Trade of the Week: YY

Heading into Memorial Day, the market was mostly up.  Except for YY, a Chinese ADR that just seems to be heading in the wrong direction.  After hitting 140s twice earlier this year, it dropped to a low of 90 around April 25.

It has been consolidating around the 90-100 levels for the past month.  On Friday before Memorial Day, YY took a huge hit, down about 4%.  Consequently my calls dropped to around -1.5k.

If you notice the red candle (third to last on the chart).  A drop like that would have scared me to sell the stock, but instead, cooler heads prevailed on that day and I held on.  I actually bought 1 more call.  In hindsight, it was the perfect opportunity to buy more, but it might have been either greed or fear that made me just buy one more.

Then come Memorial Day weekend and opening on Tuesday.  The market tanked.  With concerns over Italy and other political stuff, the major indexes were down big.  All, except for YY and a handful of others.  YY kept me afloat and then came Wednesday when it was up nearly 8%, breaking past the 115 level.

There's probably more room for YY to run as it has broken free from its 20 day, 50 day and 200 day moving averages.  I am looking at resistance around 130 and even 140 before we hit earnings, but that is about 1 week away.  If YY is going to run, it will run up into earnings and then we shall see.

I'm holding on and going to see what this will bring me.  YY is ripe for the picking, and I will harvest some as it hits some of those resistance points, but for now, I'll let it run.

Updates coming soon.

Trade of the day: MU

I was hoping to hold this longer, but had a bunch of MU calls expiring 6/22 at a strike of $49.  Last time MU rallied to $60+ before earnings and then tanked to $50 levels.  This time I have a bunch and they already made the move back to around $60.  What should I do?

With earnings over a month to go, I decided to sell and hope there will be a pullback later on in the month so I can pick up some more... though I think they will continue going up...




In any case, I am happy with a 65% return and will now focus my money to other companies.  I wish you happy investing and many blessings!

Trade of the Week: ADSK

Took the easy gains for ADSK last Friday.  Usually I wait until earnings before selling a stock, but last week was very choppy especially with the errant tweets by the Potus.  I ended up just taking my gains and enjoyed the weekend.  Nothing Fancy.

I originally had 5 calls, but due to a slight dip on Monday, I added 5 more to cost average.  I only did this because I had enough time for the stock to comeback before the earnings report. 

And as fortune would have it, it continued on its upward trend until Friday.  ADSK had negative EPS for the previous quarters, and this quarter is forecasted to have a positive EPS.  I'm not sure what that all means, but the effect is that the stock continues to climb.

But my main decision to sell was that with the new batch of calls, I had almost 10% of my portfolio in this position, and with the 35% rise, it was almost 15% of my portfolio.

According to my plan, I hope to have no more than 5% of my portfolio in any 1 position.  So, with that, I decided to take profits.  I still think ADSK has more room to run before earnings, but I needn't take any extra risk.

Always, have a plan for your positions and be sure to stick to your plans, whatever they may be...

I wish you much blessings and happy investing!

Earnings Thursday: NVDA

With all the bad news that came a few weeks earlier about AAPL missing estimates and suppliers producing less due to cuts in iPhone sales, the semiconductor stocks took a big hit.  Along with the decline of Bitcoin and other crypto currencies, even NVDA dropped, but as the market seems to think, they are still top dog.

And of course, 1 week prior to today's earnings, I started loading up on NVDA calls.  On May 3, NVDA closed above the 20day moving average and May 4, NVDA broke through the 50 day moving average, all bullish signs.

So needless to say I picked two calls up.  I have another two calls at 225 strike, both over 100% return.  And I learned from my WB debacle and decide to sell early.  Like around 10:30 AM today, even though I have another 5 hours to go, I'll bank the 100% profit and move on to my next stocks.

The stocks on my list for the next couple weeks include: CRM, AMAT, INTU, ADSK.  I will update you as we go along, but these have been good momentum companies right before earnings.  Whether or not they beat earnings is another story, because that is not my problem.

For your enjoyment and education.  Happy investing!

Earnings Wednesday: WB (why I need to keep an eye on the calendar)

Today was one of those days, I wished I double checked my homework.  I usually write down the earnings date of each stock I purchase just so I won't be surprised.  Tuesday before the end of close I noted that I had an incredible gain in WB and that earnings was on Wednesday 5/9/2018.  Great, one more day of gains or so I thought.

I was up nearly 100% and enjoying a sweet $3.6k profit.  But little did I know, the earnings was Wednesday MORNING not AFTERNOON.  This threw a wrench into my plan.  I usually sell prior to announcement and just ride up trend followers.  I never want to gamble with a 50/50 chance at earnings.  Anyways, WB dropped over 10% after earnings.  I was dismayed.  My 100% return became a 50% loss.  I closed it out and didn't look back.  It was a shot in the gut, but a reminder that playing the earnings report really is a gamble.

In any case, I recovered with other stocks like NVDA, GOOGL, and others, but it definitely hit me psychologically for making a rookie mistake... getting the date of the earnings wrong by 8hours... before market opens vs. after market closes.  I hope this serves as a warning to new traders to keep a very close eye on the earnings calendar.

Happy trading and enjoy the up trend.

Friday Earnings: BABA

This one worked out in my favor, but there was so much volatility that I almost lost out on this trade.

The day before earnings, BABA took a dive, and my calls went from +40% to about -10% in the morning.  With a quick rally later on in the day, my BABA call recovered to around 40% again.  I was scared but never really considered selling just yet.

The question was should I sell at the end of the day or risk earnings?

BABA was around 177 and I had the 170 calls.  I decided to sell a 175 call (slightly in the money) expiring end of the week.  This was a very conservative call because I wanted to collect more premium, but in essence, I was practically giving it away for 175.

My hope was that BABA would go down in the morning and then I close out that part of the spread and watch it go back up.

And wouldn't you know it, that is exactly what BABA did on 5/4.  It opened around 180 but dropped to 178 and once I saw strength and buyers, I closed out my short 175 call.  I then proceeded to watch BABA jump a few more percentages and I sold out around 183.  I thought I was something.  I added another grand in earnings to my trade.  I thought I was something.  Then the rally began.  BABA proceeded to test 190, and closed up almost 6%.

Bottom line, don't fight the trend.  When the market is going up, just go with the flow, no need to fight the trend.  This could be said about AAPL, AMZN, GOOGL, TSLA, or any number of companies.  Once the buyers are coming in, just let it ride.

Lesson learned.  Happy investing!

Earnings Tuesday: AAPL

You can't win them all.  Even as I am writing this analysis, I am eating a bowl full of missed opportunity.  Well, not exactly.  Coming into yesterday's earnings, I picked up 2 calls of AAPL in the morning and then 3 more later in the day as I saw some strength from a beaten down AAPL. 

With the "news" or should I say rumors of it missing iPhone expectations and major supplies down, I really thought they had missed expectations coming, but still wanting to ride the wave, I picked up on the strength in AAPL's charts.

AAPL was bouncing off its 200 day moving average (green line) and still full of energy.  I should have figured all it could to do was to go up.  I picked up AAPL 2 days before earnings at the 160 strike price (.7 delta).

At 3:45PM I decided close out the position.  I was already up 27% and didn't want to Jinx myself, so I took the money and ran.  $1k in 2 days.  Not bad.   But then after-hours, I see AAPL beat expectations and is jumping another 3-4%.  Oh well.  You really can't win them all.

I hope you are having fun in this earnings period.  The market is still very volatile, with lots of whipsaws, but the one constant has been good earnings.  Even with the ups and downs, the market, for the most part, is still moved with positive news.  For that I still have my edge.

Next up: TSLA (5/2) and BABA (5/4)

May God bless you richly.