Category Archives: Uncategorized
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
Regeneron Pharmaceuticals (REGN) Retreats to Notable Technical Support
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.
REGN has been in the spotlight ever since President Trump received its antibody treatment earlier this month, check out what the following two articles have to say about the company – 3 COVID-19 Antibody Stocks That Are Leading the Race and Is Regeneron a Buy Before Nov. 3?
Technicals
Horizontal support at $562 is quite important for REGN as it acted as resistance back in 2015 to trigger a major reversal. The level has halted the decline that started over the summer and there are some signs that the upward cycle could continue once again. In addition to the horizontal level, there is a rising trendline in play that originates from the low in early September and the 200-Day moving average is rapidly rising to converge towards the $562 price point.
REGN Chart October 2020
If you agree there’s further upside ahead for REGN, consider this trade which relies on the stock remaining above the $577.5 level through the expiration in five weeks.
Buy To Open REGN 27NOV20 577.5 Puts (REGN201127P577.5)
Sell To Open REGN 27NOV20 580 Puts (REGN201127P580) for a credit of $1.03 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when REGN was trading near $580. 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 $101.70. This reduces your buying power by $250 and makes your investment $148.30 ($250 – $101.70). If REGN closes at any price above $580 on November 27, both options will expire worthless, and your return on the spread would be 69% ($101.70 / $148.30), or 718% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 24, 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
Can ADBE (ABDE) Hold Above the $500 Price Point?
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 doubled from its March low and the following two articles lay out reasons why the stock may continue to gain. One of them even makes a case that the stock is undervalued at current levels, despite to impressive rally as of late – Adobe’s Stock To Continue Growing? and Adobe (ADBE) Up 6.4% Since Last Earnings Report: Can It Continue?
Technicals
After correcting lower last month, ADBE is starting to once again show signs of upward momentum. The stock has posted a series of higher highs and higher lows over the last four weeks as it oscillates higher in a rising trend channel. Buyers have defended the lower line of the channel as well as dips towards the 20-Day moving average. Further, a break above the $500 level earlier this month is a sign of strength. Strong near-term support is seen in the $492-$500 area.
ADBE Chart October 2020
If you agree there’s further upside ahead for ADBE, consider this trade which relies on the stock remaining above the $500 level through the expiration in five weeks.
Buy To Open ADBE 20NOV20 495 Puts (ADBE201120P495)
Sell To Open ADBE 20NOV20 500 Puts (ADBE201120P500) for a credit of $2.08 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when ADBE was trading near $503. 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 ADBE closes at any price above $500 on November 20, both options will expire worthless, and your return on the spread would be 70% ($206.70 / $293.30), or 798% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 17, 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
Lowe’s (LOW) Boosted by Rise in Home Improvement Spending
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.
LOW has posted stellar gains in the year thus far. The following two articles discuss what drove the surge since late March as well as reasons why the momentum could continue – Lowe’s Stock Can Keep Rallying Because People Will Be Spending More Time at Home for Longer and 3 Reasons Why Lowe’s (LOW) Is a Great Growth Stock.
Technicals
From a technical standpoint, LOW has broken higher from an ascending triangle which is a bullish continuation pattern. Support for near-term dips falls at $170.50 which marks the top of the triangle. LOW is up 45% year to date and is one of only a few stocks on the IBD Top 50 list that has broken to a record high in October.
LOW Chart October 2020
If you agree there’s further upside ahead for LOW, consider this trade which relies on the stock remaining above the $172.50 level through the expiration in five weeks.
Buy To Open LOW 13NOV20 170 Puts (LOW201113P170)
Sell To Open LOW 13NOV20 172.5 Puts (LOW201113P172.5) for a credit of $1.13 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when LOW was trading near $173. 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 LOW closes at any price above $172.50 on November 13, both options will expire worthless, and your return on the spread would be 81% ($111.70 / $138.30), or 924% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 10, 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
DR Horton (DHI) Powers to 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.
DHI is an outperformer in the markets. The stock closed at an all-time high in the past week while the S&P 500 would need to rally another 7% to achieve the same milestone. Check out what the following two analysts have to say about the stock – D.R. Horton (DHI) Gains As Market Dips: What You Should Know and D.R. Horton, LGI Homes In Buy Range, Lowe’s Sets Up As Coronavirus Fuels Housing Stocks
Technicals
DHI has posted gains in the last six straight months and shows renewed upward momentum after breaking above the August top. The stock was held lower by horizontal resistance at $75.60 in September and this same price point is now seen as downside support. There is also a rising trendline in play that shows further support in the $74-$74.50 range. Back in June, DHI hovered around its 20-day moving average for about a month before continuing the upward momentum. A similar pattern could be playing out now as the stock spent most of September consolidating around its 20 DMA.
DHI Chart October 2020
If you agree there’s further upside ahead for DHI, consider this trade which relies on the stock remaining above $77.50 level through the expiry in five weeks.
Buy To Open DHI 06NOV20 75 Puts (DHI201106P75)
Sell To Open DHI 06NOV20 77.5 Puts (DHI201106P77.5) for a credit of $0.89 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when DHI was trading near $78. 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 $87.70. This reduces your buying power by $250 and makes your investment $162.30 ($250 – $87.70). If DHI closes at any price above $77.50 on November 06, both options will expire worthless, and your return on the spread would be 54% ($87.70 / $162.30), or 616% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 3, 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
Intuit (INTU) Chart Signals Buying Opportunity
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.
INTU looks appealing from both a technical and fundamental perspective. The following two articles discuss why investors might be drawn to the stock from the fundamental side of things – Here is Why Growth Investors Should Buy Intuit (INTU) Now and Here’s Why I Think Intuit Is An Interesting Stock.
Technicals
On the technical side, INTU trades near an important confluence of support, and recent price action suggests that buyers are willing to defend it. Support for INTU comes from its 100-day moving average as well as a horizontal level at $305. This price point previously acted as resistance back in February when the markets broadly turned lower. Further, on the larger time frames, INTU tested its 20-week moving average in the past week. There was a strong rally from the indicator which has led to a bullish reversal candlestick formation on a weekly chart.
INTU Chart September 2020
If you agree there’s further upside ahead for INTU, consider this trade which relies on the stock remaining above $317.50 through the expiration in five weeks.
Buy To Open INTU 30OCT20 315 Puts (INTU201030P315)
Sell To Open INTU 30OCT20 317.5 Puts (INTU201030P317.5) for a credit of $1.03 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when INTU was trading near $318.50. 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 $101.70. This reduces your buying power by $250 and makes your investment $148.30 ($250 – $101.70). If INTU closes at any price above $317.50 on October 30, both options will expire worthless, and your return on the spread would be 69% ($101.70 / $148.30), or 787% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates September 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
Horizon Therapeutics (HZNP) Has More Than Doubled in 2020
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.
HZNP has gained 120% YTD and several analysts expect it will continue to march higher. Check out the following two reports for several reasons why the company is likely to remain in demand – 5 Reasons to Invest in Horizon Therapeutics Amid Coronavirus and Hedge Funds Never Been This Bullish On Horizon Therapeutics (HZNP).
Technicals
When stocks are in a strong bullish trend, there are often periods of consolidation that are followed by a continuation higher. HZNP shows exactly this pattern as the stock consolidated in a sideways range for six weeks before finally breaking higher in the past week. The same $76 price point that previously acted as resistance has acted as support following the bullish range breakout which is also a positive sign. In the event the stock dips below $76, there is strong support from a rising trendline that has been in play for nearly six months.
HZNP Chart September 2020
If you agree there’s further upside ahead for HZNP, consider this trade which relies on the stock remaining above $80 through the expiration on October 16.
Buy To Open HZNP 16OCT20 75 Puts (HZNP201016P75)
Sell To Open HZNP 16OCT20 80 Puts (HZNP201016P80) for a credit of $2.13 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when HZNP was trading near $80. 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 $211.70. This reduces your buying power by $500 and makes your investment $288.30 ($500 – $211.70). If HZNP closes at any price above $80 on October 16, both options will expire worthless, and your return on the spread would be 73% ($211.70 / $288.30), or 1066% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
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
Dollar General (DG) Looks Set to Continue the Steady Rise
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.
Several Analysts have good things to say about DG, here are two of them – 2 Top Stocks to Buy in September and Hedge Funds Keep Buying Dollar General Corp.
Technicals
DG has been trading within a rising trend channel for just over four months. The 50-day moving average is currently near the lower boundary of the channel to offer a confluence of support. A test of this support zone in the past week resulted in a move higher which shows that buyers are willing to defend this area. In addition to the steady trend, DG has outperformed most of the stocks on the IBD Top 50 list over the past few weeks.
DG Chart September 2020
If you agree there’s further upside ahead for DG, consider this trade which relies on the stock remaining above $200 through the expiration on October 16.
Buy To Open DG 16OCT20 195 Puts (DG201016P195)
Sell To Open DG 16OCT20 200 Puts (DG201016P200) for a credit of $1.98 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when DG was trading near $200. 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 $196.70. This reduces your buying power by $500 and makes your investment $303.30 ($500 – $196.70). If DG closes at any price above $200 on October 16, both options will expire worthless, and your return on the spread would be 65% ($196.70 / $303.30), or 741% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates September 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
Microsoft (MSFT) – Recent Tech Sell-Off Offers a Buying Opportunity
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.
The following two articles offer compelling reasons why MSFT could move higher. The first is an analyst upgrade with a price target of $240 – Microsoft Stock (MSFT) Gets Price Target Increase To $240 From Mizuho. The second article outlines MSFT’s competitive advantages – 2 Tech Stocks That Are Thriving Despite the Coronavirus.
Technicals
We offered a trade idea in MSFT at the start of August and the option spread used in the idea expired for a 74% profit on Friday. Because of the decline over the past few days, the stock is once again testing the same trendline that made the trade attractive last time around. The 50-day moving average is also in play and this is an indicator the stock has not closed below in over four months. Friday’s candlestick formation signals buying activity and that the support confluence is being defended, at least so far.
MSFT Chart September 2020
If you agree there’s further upside ahead for MSFT, consider this trade which relies on the stock remaining above $212.50 through expiration on October 9.
Buy To Open MSFT 09OCT20 210 Puts (MSFT201009P210)
Sell To Open MSFT 09OCT20 212.5 Puts (MSFT201009P212.5) for a credit of $1.20 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when MSFT was trading near $214. 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 $118.70. This reduces your buying power by $250 and makes your investment $131.30 ($250 – $118.70). If MSFT closes at any price above $212.50 on October 9, both options will expire worthless, and your return on the spread would be 90% ($118.70 / $131.30), or 1027% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates September 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
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