Sunday, October 6, 2013

Some Trade Ideas.

For the week SPY was flat, QQQ +.42%, IWM +.41% & DJIA was the laggard shedding -1.22%.  Certainly impressive considering the Washington freak show, which coming soon is a new addition to the theatre in the Debt Ceiling starring all of your usual suspects.  The market continues to be very tradable and the newsletter has had some tremendous ideas throughout the week.  I have continued to just day trade, which has gone very well but I certainly could have done a lot better swinging a lot of my ideas but headline markets are not my favorite for over night risks fortunately I have the ability to grind out a living day trading although not nearly as enjoyable as position trading.

Some levels on SPY to look out for to the upside Friday's highs 169.06-169.20-169.50-170.  To the downside- 168.50-168.25-167.50.

Technical Set-Ups

ABC pretty straight forward looking for volume to come in through 62.54. 

 ARG worked off near over bought conditions and has the potential to run through those highs needs volume to return.
 AXP similar to the STZ set-up I highlighted last week as a higher failure rate but can be explosive and STZ went on to put up 5 points or 9% so these can be power moves. Watching that 75.51 area.
 BBBY is going to go here shortly 78.88 break is on watch.
 CINF thinner name set-up pretty tight here 47.80 break.
 CME RSI running as it pounds up near that 75.50 area so watching for a break through.
 COP 71 area break.
 COST just not acting well watching that 113.98 area, still think there is a 1-2 point trade here if that fails again.
 CVX possible hammer here on 200 day but continues to not act well, figured the XOM upgrade might get this moving but no sir.  So one could potentially play the hammer reversal on strength or short that 117 area or green to red.  Also, seeing some bull risk reversals trade with the Oct. 120/115 1,000 being rolled to Nov 120/115.
 ECL 99.57 break.
 EMN 80.10 break
 EW interesting here through 73.50 a lot of gap to fill and RSI running MACD bullish cross so something to keep an eye on.
 FAST 51.60 been watching this one and after a few big volume rips has now had a few low volume consolidation days could be ready for another leg up this week.
FLIR 32.58 break MACD crossing bullish and ACCUM/DIST running higher.
 FOSL still eyeing that 120 area here.

 GGB 7.75 break could get this moving.

 IR 66.62 break.

 KORS keep your eyes peeled for 77 area break really like this set-up and the name could be a flier next week.
 LEA early stage break out watch that 74 area this is coming out of a long range targeting 79 area, love this set-up and hope to be able to get involved next week all momentum indicators are bullish and nice volume came in on Friday.
 LRCX 52.31 break.
 MA some what tame 30 point correction watching this one through the 10 day to run back up to highs 676.30 break.
 NOV highs are 80.26 but this looks good through 80 lacking volume though so need to be careful and make sure its there.
 SBUX 77.85 been quiet of late but really like the set-up.

TRV watching that 85-85.21 area break to get this moving.. A nice value name for the longer term investor as well.
 TWX 66.68 break.
 YELP just keeps going next stop looks like 80, 73.50 break or opening range highs red to green etc... all in play.

Also all the usual suspects are in play AMZN, NFLX, AAPL, LNKD, GOOG & PCLN ETC..

So the focus of this newsletter has been break out plays and options analysis but that just scratches the surface so going to take a few moments today to go through a few interesting situations I came across.


So I came across T & VZ two names that have pretty much been dogs, but what I saw when I was browsing the daily charts was high volume hammerish candles being put in on Friday, and it looked to be worth some investigation.  What I found was what looks to have been capitulation selling on the 5 minute chart for Friday, also interesting was it capitulated right into the Bollinger bands on the 60 minute chart and then bounced fairly hard.  The top charts are the 5 minute and the bottom ones are the dailies and these two did it at the same time together so these are interesting into next week as a long idea as this type of situation tends to be fairly reliable for reversals so there could be a run here setting up.

VZ 5 Min from Friday  on 10/2 trader buys 1 by 2 April 47/50 ratio call spread for .08 debit. & on 9/20 there were about 6,000 Oct 52.50/41 bull risk reversals bought.
 VZ Daily
T 5 Min from Friday.
 T daily chart.
Consumer Staples

The Next interesting thing I saw was in consumer staples I had been noticing this throughout the latter part of the week but also these names have been dogs but coming into solid support and building hammers.

Exhibit A GIS negative earnings as they cannot increase sales but generate growth by raising prices.  Bouncing off 200 day support here with a few hammerish candles and closed on the highs on Friday.  RSI curling up so watching here for possible reversals might not be a bad idea. 10/2 smaller buyers in Oct 50 calls and Jan 49 calls
 Exhibit B K hammer reversal on Wednesday with follow through Thursday and Friday and a close on the highs on Friday pushing right up against 10 day supply RSI curled higher and out of over sold, MACD curling higher and looking for the bullish cross and like GIS accum/dist has remained high throughout the sell off in these names.
 Exhibit C KO hammer right off prior 2012 resistance with a possible capitulation selling day on Wednesday, momentum indicators not as bullish here, but this one is in the earliest stages of a reversal if there is one.  10/3 Traders roll out Oct 39 calls calls 4,000 to 3,000 Nov 37 calls, 9/27 treader rolls out 8,400 Oct 40 calls to 8,400 Nov 40 calls also a buyer of 2,000 Oct 25th 38.50 calls.

Options Activity

VLO shares have not caught a bid since the beginning of the year, but caught an upgrade last week and are looking to try and rally some with RSI moving higher a bullish MACD cross imminent & accum/dist curling upwards in addition to a close above the 10 day.

The Trade: Trader buys 14,000 Dec. 39 calls for .38

My Take: For the entire summer any rally in shares have quickly been sold and this is not something I am interested in believing as shares have a lot of work to do.  In addition this type of play basically gives very limited flexibility as far as selling premium creating spreads etc..  EPS at the end of the month, will note the action.
NBG shares woke up on Friday for a 10% rally and options traders got bullish as shares clear this long range.

The Trades: Jan 5 calls 1,000, Jan 5.50 calls 1,000 & Jan 7 calls 2,500 ran 2x daily call volume with net delta of +209K.

My Take:   For now this really looks like it does have room into the $5's and those Jan 5 calls for .40 are not looking too bad here.
BP shares continue in this range and I have spoken about bullish positioning in the past but shares continue to tread water and are unable to break above.

The Trade: Trader sees volatility and buys 5,000 Nov 42 straddles.

My Take: Earnings 10/29 as a catalyst you know this probably is a decent play here and one which I believe could certainly end well.  For me I continue to favor the long side as the positioning has been bullish and I am just waiting for a break above this triangle to seek entry.
ETE had a blow off top and shares came back in to test 10 & 20 day support which held and now look poised for a run back to the highs.

The Trade: Trader buys 1,500 Nov 70 calls.  Daily avg. volume is only 1,200

My Take:  Chart looks decent here setting an alert for 67.50 area to see if there is anything here.
ROC shares have performed well while being range bound for the better half of the year albeit an 8 point range.

The Trade: Trader enters a combo bull spread buying 1,250 Feb 70/75 call spreads & sells 1,250 Feb 60 puts for a .20 debit.

My Take: EPS 10/21 shares are setting up well here ahead of the date for a 69 break this is a very bullish spread with daily volume in calls just at 400 so certainly one to watch for that 69 break.
DECK after about a year of weakness from missed earnings report is showing signs of life here.

The Trade:  Trader buys a bull spread combo 2,000 Dec 70 calls and sells 2,000 Jan 80 calls & sells 1,500 Jan 57.50 puts.  For 1.50 debit.

My Take: Earnings 10/21 not a name I want to be blindly directional long into the report but until then I have an alert set for a 69 break for a run to the 71 area.

MTOR shares have doubled since May but traders see this getting ahead of itself and are looking for a pull in.

The Trades: Traders very active in Nov 7 puts for about 5,000 running 5x daily avg volume.

My Take: Earnings 11/11 so traders are positioned for that, but before that one may want to set an alert for 7.87 break down which should test 7.50-7.30 area and below that should see a $6 handle.

RAX failed to break above that significant resistance and got rejected pretty hard.

The Trades:  Trader buys 2,500 Nov 47.50/40 put spreads. 

My Take- EPS 11/4 noted for that also could be a short trade here on a 50 break targeting the 48 area.
ANF these teen retailers are struggling and the only rallies are news driven either takeover or private equity etc..  
The Trades:  Nov 30 put buys over 1,000.

My Take: Sets up for a short here through 35 or 34.64.

Other Options Activity

CWH- Trader buys 6,000 Nov. 25 calls ran 5x daily avg. call volume.
LVLT- Trader buys 1,300 Nov 30 calls also Dec. 31 calls seeing action ran 4x daily avg call volume.  Blow off top here needs to consolidate same to make a run at new highs.
CNDO- Trader buys 1,000 Nov. 12.50 calls & sells 1,000 Feb. 17.50 calls.
JPM- Nov. 55 calls active.  Did the whole piece on the banks earlier in the week, so we all know where I stand.
C- Trader buys 2,200 Oct 47 calls & another trader enters a Dec 50/48 bull risk reversal 2,500 times.  Earnings 10/15 will be looking to play.
BID- Trader buys 4,000 Nov. 55 calls.
AGN- Trader rolls out of 2,500 Oct 92.50 calls to 2,500 Nov 92.50 calls. Continue to look for that 92 break for a run back to test that 93 area.
UUP-March 2014 22 calls finding buyers for 2,500. Hammer reversal on Thursday with follow through on Friday so far so good.
 FB- Buyers of over 6,000 March 39 calls. Stock replacement.
MSFT- Trader enter 9,000 April 29/38 bear risk reversals.
RAD- Finding buyers of April 6 calls 1,000 & Nov 5.50 calls about 1,000 as well.
LUV- Trader buys 2,000 Oct 15 calls.
WLL- Buyer of 1,600 Dec. 62.50 calls.  Also smaller size buyers in Nov 67.50 calls over 1,000 scattered.  Shares are really extended here, but worth noting and eyeing on pull backs or a few weeks of consolidation.
TSO- Finding buyers of Nov 46/49 call spreads over 4,000.  Also an Oct. 42 put buyer for 1,200.
HBAN- Trader rolls 1,000 Jan 9 calls to 1,000 April 9 calls.
LNG- smaller size buyers in Nov 37 calls & Dec. 36 calls.  Also some buyers of stock and sell March 38 calls for $3.

Trade Idea of The Week

GE- Shares continue to tread water and any strength is met with sellers, but traders continue to be bullish on shares into and after earnings.

The Trades: Trader rolls out of 5,000 Oct 4th 24 calls to Oct. 11 24 calls. Also some size buyers in Nov 24 calls 5,000 block and 3,000+ smaller orders.  On 9/2 Traders bought over 10,000 Nov 26 calls.

My Take: Earnings are 10/18 and will require a specific strategy at that time, but for now I am looking to get long weekly 24 calls on a break and hold above 24.22. Stop below 23.90 first target 24.35-24.50-24.90.

This is for informational purposes only and should not be viewed in anyway as investment advice.

No comments:

Post a Comment