Category Archives: Uncategorized
Thermo Fisher (TMO) Shows Renewed Upward Momentum
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
TMO shows signs it has reverted to an uptrend and with a strong fundamental outlook, the stock could see a continuation higher. The following two articles provide more details on the fundamentals of the company – Why the Earnings Surprise Streak Could Continue for Thermo Fisher and Is Thermo Fisher Scientific Inc.’s Latest Stock Performance Being Led By Its Strong Fundamentals?
Technicals
The appeal to TMO from the technical side of things is the resurgence of upward momentum since the start of the new year, TMO has broken higher from a flag pattern that had contained it for most of December and it has rallied above a horizontal level near $482. A small dip can’t be ruled out over the short term but the price action seems to suggest that TMO is ready to resume the prior uptrend with an aim for a new all-time high.
TMO Chart January 2021
If you agree there’s further upside ahead for TMO, consider this trade which relies on the stock remaining above $510 through the expiration in five weeks.
Buy To Open TMO 19FEB21 500 Puts (TMO210219P500)
Sell To Open TMO 19FEB21 510 Puts (TMO210219P510) for a credit of $3.78 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when TMO was trading near $512. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $376.70. This reduces your buying power by $1000 and makes your investment $623.30 ($1000 – $376.70). If TMO closes at any price above $510 on February 19, both options will expire worthless, and your return on the spread would be 60% ($376.70 / $623.30), or 684% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates January 9, 2021
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Marvell Tech (MRVL) – An Outperformer Among Its Peers
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
MRVL gained 79% last year compared to a smaller rise of 51% in the SOXX Semiconductor ETF. The following two articles discuss why MRVL could continue to see more upside – These 3 Chip Stocks Have Room to Grow, Say Top Analysts and Top-Rated Stocks: Marvell Technology’s Technical Ratings Rise.
Technicals
After a recent break to an all-time high MRVL has been consolidating within a range for two weeks. Strong support is seen to the downside near $45.60 as this level acted as resistance back in November. There is also a rising trendline near the same price point as well as the 20-day moving average. With strong support to the downside, it might only be a matter of time before MRVL makes another run for new highs.
MRVL Chart January 2021
If you agree there’s further upside ahead for MRVL, consider this trade which relies on the stock remaining above $47.50 through the expiration in five weeks.
Buy To Open MRVL 5FEB21 45 Puts (MRVL21025P45)
Sell To Open MRVL 5FEB21 47.5 Puts (MRVL21025P47.5) for a credit of $1.00 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when MRVL was trading near $47.50. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $98.70. This reduces your buying power by $250 and makes your investment $151.30 ($250 – $98.70). If MRVL closes at any price above $47.50 on February 5, both options will expire worthless, and your return on the spread would be 65% ($98.70 / $151.30), or 741% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates January 2, 2021
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Consider Bristol-Myers (BMY) After a Price Upgrade from Goldman Sachs
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Goldman Sachs recently upgraded BMY to a ‘Conviction Buy’ and assigned a price target of $86. There have been some other recent upgrades which are discussed in this article – Bristol-Myers Squibb (NYSE:BMY) Upgraded to “Conviction-Buy” by The Goldman Sachs Group. Also check out the following article which outlines why investors may see value in BMY at current prices – 3 Cheap Dividend Stocks For High Total Returns.
Technicals
From a technical perspective, BMY has mostly traded in a broad range after a strong rally in the second quarter. The technicals show that the uptrend remains intact and with a confluence of support nearby, this might be a good time to consider an entry. Support for BMY comes from the lower line of a rising trend channel that started in June. The 200-Day moving average falls near the lower channel line to create a strong area of support for the stock.
BMY Chart December 2020
If you agree there’s further upside ahead for BMY, consider this trade which relies on the stock remaining above $61 through the expiration in five weeks.
Buy To Open BMY 29JAN21 58 Puts (BMY210129P58)
Sell To Open BMY 29JAN21 61 Puts (BMY210129P61) for a credit of $1.15 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when BMY was trading near $61. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $113.70. This reduces your buying power by $300 and makes your investment $186.30 ($300 – $113.70). If BMY closes at any price above $61 on January 29, both options will expire worthless, and your return on the spread would be 61% ($113.70 / $186.30), or 696% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates December 26, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Advanced Micro Devices Signals More Upside After Breaking to a Record High
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
AMD has been in a steady uptrend since the start of November and looks set to continue the trend. Check out what the following two articles have to say about the stock – Buying Stocks for Christmas? Put These Tech Stocks Under the Tree and Jim Cramer: Focus on Single Semiconductor Names, Stay Away from ETF Baskets.
Technicals
From a technical standpoint, AMD has confirmed that it has resumed the uptrend by breaking above the September peak. The stock now shows strong support near the September high, around $94. Further support is found slightly below it from a confluence created by the 20-Day moving average and the lower line of a rising trend channel. In addition to the technical chart, AMD has been steadily outperforming the semiconductor index (SOX) and Intel (INTC) for four years.
AMD Chart December 2020
If you agree there’s further upside ahead for AMD, consider this trade which relies on the stock remaining above $96 through the expiration in five weeks.
Buy To Open AMD 22JAN21 93 Puts (AMD210122P93)
Sell To Open AMD 22JAN21 96 Puts (AMD210122P96) for a credit of $1.10 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when AMD was trading near $96. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $108.70. This reduces your buying power by $300 and makes your investment $191.30 ($300 – $108.70). If AMD closes at any price above $96 on January 22, both options will expire worthless, and your return on the spread would be 57% ($108.70 / $191.30), or 650% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates December 19, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Consider Adobe (ADBE) After the Latest Earnings Report
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
ADBE has been a regular on the IBD Top 50 list over the past few years and is a favorite among analysts. Check out what the following two reports have to say about it – This Is Adobe’s Must-Hold Support Level if You Buy the Earnings Dip and Adobe (ADBE) Perfectly Positioned for New Highs.
Technicals
Both of the articles linked above discuss a technical outlook for ADBE and for good reason. The stock trades near several moving averages on a daily chart and is also testing support from a rising trendline that originates from a low posted in early November. It’s rare to see such a strong confluence of support lining up in this way and considering the strength this stock has displayed over the years, the odds favor a move to the upside from this point.
ADBE Chart December 2020
If you agree there’s further upside ahead for ADBE, consider this trade which relies on the stock remaining above $475 through the expiration in five weeks.
Buy To Open ADBE 22JAN21 472.5 Puts (ADBE210122P472.5)
Sell To Open ADBE 22JAN21 475 Puts (ADBE210122P475) for a credit of $1.18 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when ADBE was trading near $476. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $116.70. This reduces your buying power by $250 and makes your investment $133.30 ($250 – $116.70). If ADBE closes at any price above $475 on January 22, both options will expire worthless, and your return on the spread would be 88% ($116.70 / $133.30), or 1004% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates December 12, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Pacira BioSciences (PCRX) Dips After Breaking to Multi-Year Highs
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
PCRX showed strong upward momentum last month and briefly traded at levels not seen in nearly five years. Several analysts think the stock can continue to gain, the following two articles provide details – IBD 50 Stocks To Watch: This Pharma Stock On 115% Run Eyes Buy Point and $129.57 Million in Sales Expected for Pacira BioSciences, Inc. (NASDAQ:PCRX) This Quarter.
Technicals
The upward move from November has resulted in a bullish candlestick pattern on a monthly chart that suggests dips will be bought over the near-term. The stock has pulled back from its multi-year highs but is seen approaching a strong confluence of support. This comes from an intersection of the 50 and 100-Day moving averages, currently around $58.50.
PCRX Chart December 2020
If you agree there’s further upside ahead for PCRX, consider this trade which relies on the stock remaining above the $60 level through the expiration in six weeks.
Buy To Open PCRX 15JAN20 57.5 Puts (PCRX200115P57.5)
Sell To Open PCRX 15JAN20 60 Puts (PCRX200115P60) for a credit of $1.13 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when PCRX was trading near $61. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $111.70. This reduces your buying power by $250 and makes your investment $138.30 ($250 – $111.70). If PCRX closes at any price above $60 on January 15, both options will expire worthless, and your return on the spread would be 81% ($111.70 / $138.30), or 758% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates December 5, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Will Amazon (AMZN) Break Higher Into the Year-End?
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
AMZN is up 74% in the year thus far and looks poised to continue the uptrend. The following two articles highlight some of the reasons investors may continue to push the stock price higher – Cramer’s Year-End Game Plan: Load Up On Digital Retailers and Wall Street Analysts Say These 5 Stocks Are A Buy As The World Prepares For The Post-COVID-19 Era.
Technicals
AMZN has been consolidating sideways within a triangle since the start of September. These types of consolidations often end with an upward break when they are preceded by a strong bullish trend. On a monthly chart, the stock is set to print a bullish reversal candlestick pattern which hints that the uptrend might be restarting. Lastly, as mentioned in one of the articles above, seasonality patterns show that AMZN typically performs well in this part of the year.
AMZN Chart November 2020
If you agree there’s further upside ahead for AMZN, consider this trade which relies on the stock remaining above $3195 through the expiry in six weeks.
Buy To Open AMZN 8JAN21 3190 Puts (AMZN210108P3190)
Sell To Open AMZN 8JAN21 3195 Puts (AMZN210108P3195) for a credit of $2.55 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when AMZN was trading near $3195. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $253.70. This reduces your buying power by $500 and makes your investment $246.30 ($500 – $253.70). If AMZN closes at any price above $3195 on January 8, both options will expire worthless, and your return on the spread would be 103% ($253.70 / $246.30), or 964% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates November 28, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Palo Alto Networks (PANW) Soars Following Earnings Beat
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
PANW rallied to fresh all-time highs after first-quarter earnings and revenue surpassed analyst expectations. In addition to the earnings report, Palo Alto Networks is acquiring a cybersecurity company that stands to boost its competitive edge. The following two articles provide more detail – BofA Turns Bullish On Palo Alto Networks After Q1 Beat and Palo Alto Networks: Why Expanse Is A Game Changer.
Technicals
Monday’s earnings report offered the catalyst for a bullish break of a flag pattern that had been forming for several months. The technical break signals a bullish continuation of the trend that took place in the second and third quarter. PANW has shown a steady rise in upward momentum since the start of the month and investors may look to continue buying on shallow dips.
PANW Chart November 2020
If you agree there’s further upside ahead for PANW, consider this trade which relies on the stock remaining above the $290 level through the expiration in six weeks.
Buy To Open PANW 31DEC20 285 Puts (PANW201231P285)
Sell To Open PANW 31DEC20 290 Puts (PANW201231P290) for a credit of $2.05 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when PANW was trading near $292. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $203.70. This reduces your buying power by $500 and makes your investment $296.30 ($500 – $203.70). If PANW closes at any price above $290 on December 31, both options will expire worthless, and your return on the spread would be 69% ($203.70 / $296.30), or 646% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates November 21, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Investors Flock to Facebook (FB) Post-Election
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Facebook rose sharply higher in the past week for a gain of 11.5%. The following two articles discuss the rationale behind the move and its implications – 3 Stocks That Are Big Winners After The U.S. Election and Best Mutual Funds Buy Up FANG Stocks Amazon, Alphabet, Facebook.
Technicals
The price action points to the same narrative as suggested by the articles mentioned above. There was a large move lower ahead of the election, likely attributed to investors covering their position ahead of the election. But then the rally in the past week catapulted FB to a new 2-month high, signaling a clear shift in sentiment from the earlier uncertainty. Further, FB’s outperformance compared to the broader markets during this time shows that it remains a favorite among investors. Near-term support is seen at $284 as the price point acted as resistance last month. The strong show of buying as of late suggests that near-term dips will be shallow, but if FB dips below $284, further support is seen at the 50-Day moving average. This moving average falls near a rising trendline that originates from a low printed in late June.
FB Chart November 2020
If you agree there’s further upside ahead for FB, consider this trade which relies on the stock remaining above the $292.5 level through the expiration in five weeks.
Buy To Open FB 11DEC20 290 Puts (FB201211P290)
Sell To Open FB 11DEC20 292.5 Puts (FB201211P292.5) for a credit of $1.08 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when FB was trading near $293. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $106.70. This reduces your buying power by $250 and makes your investment $143.30 ($250 – $106.70). If FB closes at any price above $292.5 on December 11, both options will expire worthless, and your return on the spread would be 74% ($106.70 / $143.30), or 844% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates November 7, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Franco Nevada (FNV) – Is it Time to Start Looking at Gold Stocks Again?
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Back in August, gold-related stocks were in the headlines as many of them were surging with spot gold prices rallying to an all-time high. Often when a certain sector is getting a lot of attention, it’s worthwhile waiting for a pullback which is why it may be worthwhile revisiting FNV which has retreated 16% from its August high. The following article outlines why FNV’s upcoming earnings report could drive its stock price higher – Franco-Nevada (FNV) Earnings Expected to Grow: What to Know Ahead of Next Week’s Release. Also take a look at this article which discusses FNV’s advantage over its competitors as a result of its unique business model – Franco Nevada Corp (FNV) Has Risen 45% in Last One Year, Outperforms Market.
Technicals
FNV tested its 200-day moving average and the candlestick pattern that has materialized since then signals that a bullish reversal could take place. Looking at the broader picture, while FNV has declined notably from its August high there hasn’t been a lot of momentum in the downward move, especially over the past two months. A triangle pattern has emerged and a break of the upper line of the pattern, roughly around $140, would offer confirmation of a bullish breakout.
FNV Chart November 2020
If you agree there’s further upside ahead for FNV, consider this trade which relies on the stock remaining above the $135 level through the expiration in seven weeks.
Buy To Open FNV 18DEC20 130 Puts (FNV201218P130)
Sell To Open FNV 18DEC20 135 Puts (FNV201218P135) for a credit of $2.08 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when FNV was trading near $136.50. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $206.70. This reduces your buying power by $500 and makes your investment $293.30 ($500 – $206.70). If FNV closes at any price above $135 on December 18, both options will expire worthless, and your return on the spread would be 70% ($206.70 / $293.30), or 544% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 31, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
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