Options In Play – Earnings On The Radar Week Of 11/1
It’s the earnings bonanza round 2. This coming week will be as busy, if not potentially more, than this past week, with huge reports in tech.
Continue Reading -->MSFT: When Good News Follows Strong Technicals
Microsoft (MSFT) had strong earnings last Wednesday, which set up a run to new record highs. Let’s go through the action. I got long Thursday, and added to my position Friday for a swing. And today, the stock gapped up to new all-time highs after the company won a $10 billion contract with the Pentagon, beating out Amazon (AMZN). I sold a big portion between $144.50-$145.50 and now I’m in management mode. Let’s go through the technicals that led us into the good news. First, the stock did a Red Dog Reversal long ahead of earnings on Wednesday — following 4 down days for the stock. That RDR was at $136.26. Then, on Thursday, the stock gapped up after earnings and held. Friday was another nice upday that gave me more confidence in the move. And today, the stock gapped up huge on the Pentagon news. It flew past that trendline at $141.80ish like it wasn’t even there to hit a new all-time high at $145.67. Here’s a bigger view of the chart: This shows you an important lesson: when you get the technicals right, the news tends to flow in your favor. Positions Disclosure: As of 10/28/2019 at 1:25 p.m. ET, Scott J. Redler was long SPY, BAC, MSFT, UBER, PINS, SNAP, LYFT, SLV calls, BYND calls, GOOGL calls; is short AAPL, JPM calls
Continue Reading -->5 Pretty Stocks, 5 Ugly Stocks
What to buy… what to sell? That’s what traders always want to know, and Sami’s here with answers. In this video, Sami explains: Why SPY looks bullish despite a hit on Friday Why he would like to play MGI, but won’t Where energy stocks are heading What he calls the “ultimate sign of bullishness” Why he’s looking to get back in QQQ Why EW, LTHM and MNK are on his buy list Why DO, HPQ and JELD are on his sell list This is the swing trading game plan you need. Will you take it?
Continue Reading -->Options in Play – How to Calculate the Priced-in Move
It’s earnings season and everyone wants to know what stocks are pricing in. There is a simple way to figure it out that doesn’t require a ton of math.
Continue Reading -->Options in Play – Try to Plan Ahead
One of the great things about earnings season is that there is a lineup of news on the calendar for you to see. Having companies confirm the date of their earnings release gives you the opportunity to build a plan, and it is one of my favorite ways to design trades.
Continue Reading -->AMZN: From the Go-To List to the A-Squad
Every morning, I post my Go-To List in the Redler All-Access newsletter. It’s a core list of 10-15 names I’m always watching for possible entries. Here’s an excerpt from Tuesday’s Note: AMZN had been lagging for months, but when it does move, it can be very rewarding. Monday was the first day that AMZN showed some relative strength. That turned it from just another name in the corner of my eye to a prime focus, and I bought call options. Then on Tuesday, I said it needs to get and stay above $1746 to wake up — and it did wake up. I bought some pre-market as a spec play, and then added when it triggered over $1746. It hit $1776, so I sold some using my Tier System (taught in Path to Profits) A Tier System helps me net money on trades that work, and then gives me a framework for managing those positions. I sold more after the open on Wednesday. My target range has been $1785-$1790, so I finally closed the trade out late Wednesday morning after the stock hit $1786.24. This is a great example of how combine a process, routine, tactics, and strategy to make a living. Positions Disclosure: as of 10/16/2019 at 12:02 p.m., Scott J. Redler is long TWTR, AAPL, SNAP calls, AMRN calls, TWTR calls, BYND calls, AMZN calls, SPY
Continue Reading -->How to Roll Options Forward Like a Pro
Rolling options contracts forward is a key risk management tactic in options trading. Rolling can help you lock in profits on a successful trade, while reducing downside risk and keeping some further upside potential.To roll options forward, you must have a plan for handling positions before you enter them, and today, I’m going to give you my process in this video:What Does Rolling an Options Contract Forward Mean? Rolling an option means closing a current contract and buying another contract with a higher (for call options) or lower (for put options) strike price on the same stock. The new contract will cost less than the previous one, lowering total money at risk in the trade This is done when the stock (or the options contract) has moved in your favor, and you want to lock in a profit. So essentially, you are swapping for a new, less expensive option. Rolling Options Works Best With Swing Trading Options Swing trades tend to have a longer-term profile, develop more slowly, and usually allow you to work into/out of a bigger position. This is why rolling works best with swing trades. Day trades are very short-term, so the goal is to have close targets, tight stops, and be more aggressive in taking risk off. So it’s more of an “in or out” mentality. Event trading is typically more boom or bust — stocks tend to have huge swings around events, and there is not always a chance to scale back risk post-event You can roll contracts with day and event-based trading — it’s just not easy, and you have to be fast. First Order Of Business – Setting Targets Before entering a trade, I like to have at least 2 targets and a stop range. The first target is relatively achievable. The second target can be more aggressive. I set targets/stops using technical levels or profit percentage levels. Technical levels include: moving averages, key support/resistance, or extension levels from current prices (5%/10%/20% etc.). Profit percentage levels are net gains on the position. For examlpe, if you bought a call for $1 and you were targeting a 50% gain, you would look to sell the call around $1.50 This Is How I Roll Once a stock hits my first target, my main goal is to lock in money and cut risk. This is what I generally do: Close the current contract and buy a higher (if calls) strike contract that is less than the debit I paid for the original position Buy a contract that has another week/month of time to expiration vs. the original. A Rolling Options Case Study With KHC With KHC, my trade went like this: Step 1: Bought Oct $27.50 call for $0.50Step 2: Sold the Oct 27.50 call for $1.75 (locking in $1.25 of profit)Step 3: Bought the October $30 call for 40 cents So even if the roll expired worthless, I would still expire with a profit. And if the roll happened to take off, I’d still have more upside potential. Makes sure you watch the video for the full breakdown! Click to see Dan’s positions as 10/14/2019 at 4:00 p.m. ET
Continue Reading -->What Swing Traders Need to Know Right Now
The market gapped up big on Friday on the expectations of a ‘partial’ trade deal. But what’s coming next? In this video, Sami shares with you: Why Sami doesn’t see follow-through on Friday’s topping tail The importance of news in today’s environment Why YNDX was such an amazing short on Friday The reason we can’t go all-out bullish just yet Why AKCA, APPN, AVYA, and COLD are on Sami’s buy list Why APHA. NET, PBYI, and ZYNE are on the short list This combination of market analysis + trade ideas is the perfect way to start the week, so check it out. And if you missed Earning Engine LIVE over the weekend, just click here.
Continue Reading -->Is Today the Mother of All Fades?
Is Friday’s big move just a big old fade? Jeff Cooper answers this hard question: In this video, you’ll learn: The importance of the 3-day chart Why the 3-day chart is so helpful for determining the trend 2 things that could signal a reversal The importance of anniversaries with 2002 and 2007 Why the market may be at an important inflection point
Continue Reading -->Options In Play – How to Set Daily Goals And Stop Losses
Daily profit goals and stop losses – 2 very important topics every trader needs to be familiar with. In this video, I’m going to talk about the simple method I use to set those goals and how it helps with my day to day money management.
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