The price/action of the last few days has been very positive. With the DOW Jones hitting a new high above 10,000 the market resumed its confirmed uptrend. Many important earning reports were better than expected with good improvements on both top and bottom line. We did see a little bit of “sell the news” type of reaction especially in names like INTC and GS.
Because of this picture, I started 3 new positions this week. A speculative one on Celgene, ticker CELG. They are set to report earnings next thursday. I am playing this event with out-of-the-money November $60 calls which already increased in value due to a small move up in the stock since I bought them.
I also initiated a new position in GS when the stock dipped to the $184 level which has acted as decent support over the last few days. With the numbers that Goldman reported I am looking at a price target of $200. The “sell the news” price/action is a great opportunity to establish a new position in GS.
Lastly, I established an aggressive position in LFT, Longtop Financial. This stock is working on a base-on-base price pattern. On Wednesday the stock moved up $1.61 in heavy volume and kept most of its gains in the next two sessions with yesterday decline happening in very low volume, a sign that institutions are holding onto the stock. If LFT shows more signs of accumulation next week, there is a very good chance that the stock can pass the $32.94 high set on the last attempted breakout on 8/10 which later failed. Bottom line, buy LFT above $30 if the stock gains in good volume and look for a breakout above the $33.04 level.
TechnicalTrader My recent trades, Trading Ideas celg, celgene, Goldman Sachs, GS, intc, LFT, longtop financial
I am not liking TSRA price/action this morning so I decided to close my position and sell my November $25 calls for a 17% profit. The stock reversed from a 52-week high and is currently trading down 1.5% on high volume. This is not a good sign. Sometimes it is better to protect profits at the very first signs of weakness. If INTC doesn’t report extraordinary earnings tomorrow, TSRA could very well tank. If that happens, a second buying opportunity might arise when TSRA retreats to the 10-week line. Look for institutional support before pulling the trigger however.
TechnicalTrader My recent trades intc, loss, profit, reversal, tsra
The TSRA trade I recommended on October 8th is currently working. On Friday TSRA advanced 3.8% in 62% higher volume, a sign of continued institutional support. It also marked a new 52-week high @ $31.63.
My November $25 calls are already showing a 20% return as of today. If the market continues to trend higher, TSRA should follow. On Tuesday Intel reports earnings and that could affect the price of TSRA as well.
I expect this stock to move another 5 or 6%higher before possibly pulling back to the 10-week line. Continue to stay long as the market conditions continue to improve.
TechnicalTrader My recent trades call options, market health, profit, tsra
Tessera Technologies designs smart/micro optics and chip-scale, multi-chip, and wafer-level packages for semiconductor manufacturers.
The stock, ticker TSRA broke out of a consolidation yesterday with a buy point of $29.35. TSRA is currently 2% extended in price but it is still in safe buying range. Volume on the breakout has been impressive, a sign that large institutions are buying shares.
Today I initiated an aggressive position with deep-in-the-money November $25 calls. We shall see if this breakout continues to work.
TechnicalTrader My recent trades, Trading Ideas breakout, call options, profit, tessera technologies, tsra
Today I decided to close two trades that I set up a few weeks ago.
The first one was the Goldman Sachs trade played with deep-in-the-money calls. $140 October calls were bought at $31 each and sold today slightly above $50. I decided to close this trade simply because a 65% return in 3 weeks is very good and I don’t want to risk it going into earning season. The stock however is behaving amazingly well and there is no technical reason to sell GS even at this level. In fact, if GS drops down to the 10-week line, I will be the first one to buy it again.
The second trade I closed is the CTRP trade. This stock too was played with deep-in-the-money October $50 calls. I cashed in a 20% return. In this case the stock is struggling a little bit at the $60 level and I didn’t feel comfortable holding it anymore given the fairly weak price-action.
Tomorrow I am going to be looking for the next buy candidates so stay posted for another great recommendation.
TechnicalTrader My recent trades buy recommendation, ctrp, GS, huge profit
Last week the market suffered two days of professional selling which raised the question: are we due for a pull-back? Though to say. By keeping an eye on the market we can tell if it is time to hedge long positions or to add to our existing trades. Yesterday we gained almost 2% in lower volume.
Two weeks ago I closed my Visa trade because the breakout was working on low volume, a sign of weakness. In fact the stock sold off in the next few days and is trading now around $71, below its buy point.
Goldman Sachs hit a 52-week high of $188 last week and then reversed lower to close at $179.50, not a good sign. Volume was unimpressive however. Today GS is back around $183 and if the market doesn’t start a correction I will continue to be long GS calls for the time being.
CTRP briefly dipped below its buy point last week without a significant correction however. This week the stock is charging higher in healthy volume, a sign that institutions are fueling this breakout. Resistance area for CTRP is the May 2008 absolute high around $70. I expect CTRP to test that level in the coming weeks. It is still not too late to jump into this trade.
TechnicalTrader Market Direction, My recent trades, Trading Ideas breakout, ctrp, GS, profit, V
Visa has broken out of a base a few days ago and it continues to trade well. The major problem of this breakout however is the lack of volume as the stock moves higher. In fact, V is trading below average volume lately. To me that could be a bad sign so I decided to close my position by selling my October $60 calls at $13.80. I still cashed a 10% return in just a few days however I am a little disappointed by this breakout as I was expecting something more.
Visa could continue to trade on the upside however caution is needed when there is no conviction during a breakout.
TechnicalTrader My recent trades breakout, sell, V, Visa, volume
Goldman Sachs
Closed the trading day at $177.71, up 1.72% and outperforming the broad market once again. By looking at the chart, I see possible resistance around the $190 level but for now it looks like the stock will continue to trade higher. Hold your position, today GS marked another 52-week high @ $177.90.
Visa
This stock traded higher as well today closing @ $72.87 and marking another 52-week high @ $73. There is still time to get in this trade as V is only slightly more than 1% extended from its buy point. The only red flag on this breakout is lack of volume during the upside move. I would very much like to see volume pick-up as the week progresses otherwise I might cut my position.
TechnicalTrader My recent trades Goldman Sachs, GS, profit, V, Visa
When the market wants to go higher, is somewhat easier to select profitable trades. You can’t afford not to invest right now. Opinions on where the market is headed are worthless, just observe the price action and trade accordingly. Of the last few trades I recommended lately, RHT is working GS is working, BIDU cleared resistance at $368.59 and V cleared resistance at $71.34.
I got out of RHT because of lukewarm fundamentals, GS looks like it will continue to go higher, BIDU is still very close to the buy point and Visa is just above its buy point as well. In fact yesterday afternoon I got into Visa with naked calls at the October $60 strike. I am not looking for much here, however if V has a good volume surge while increasing in price next week, I believe a 10% move in the stock is realistic. That will translate in a 70% move in the calls. If volume however doesn’t pick up by tuesday, I will close my position.
TechnicalTrader My recent trades BIDU, Goldman Sachs, GS, Red Hat, RHT, V, Visa
The opportunity to safely jump onto the GS train is almost over. The stock is currently trading at $176.60 and it broke out of a seven weeks flat base yesterday at $170.94. The stock is not quite extended in price but you have to jump in right of way as any level above $179 is riskier. GS is trading up on monster volume this morning, up almost 300% from average. My call options are already showing a nice gain of $6.50, slightly more than a 20% gain in two days.
I see no reason to take profits at this level as it looks like Goldman Sachs can easily trade near the $200 level.
TechnicalTrader My recent trades $190 level, breakout, earnings report, flat base, Goldman Sachs, GS