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Archive for August, 2018

Consider RealPage (RP) Following the Technical Break

Monday, August 27th, 2018

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.

At Terry’s Tips, we have a portfolio that actually trades most of the ideas we share here.  The portfolio has experienced some losses along the way, but so far in 2018, it has recorded an 82% gain after paying all commissions.

Terry

Consider RealPage (RP) Following the Technical Break

RealPage has received some positive new coverage as of late, take a look at – What Investors Should Know About RealPage Inc’s Financial Strength and RealPage(RP) Price Target Raised to $67.00 at KeyCorp

On Friday, RP broke higher from a bullish flag pattern that had been forming for nearly four months.  The pattern suggests the stock is ready to resume its momentum-driven rally, and break to new record highs.  Adding strength to the technical outlook for RP is a 15-month rising trendline which held the stock higher during the recent correction.  The length of time the trendline has remained intact reaffirms the momentum remains strongly to the upside for RealPage stock.

RP Chart August 2018

RP Chart August 2018

*source Tradingview.com

If you agree there’s further upside ahead for RP, consider this trade which is a bet that the stock will continue to advance over the next four weeks, or at least not decline very much.

Buy To Open RP 21SEP18 55 Puts (RP180921P55)
Sell To Open RP 21SEP18 60 Puts (RP180921P60) for a credit of $1.08 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when RP 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 only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $105.50 and your broker would charge a $500 maintenance fee, making your investment $394.50 ($500 – $105.50).  If RP closes at any price above $60 on September 21, both options would expire worthless, and your return on the spread would be 27% (428% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 23, 2018

IBD Underlying Updates August 23, 2018

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

Monolithic Power Systems (MPWR) Poised to Break to Record Highs

Sunday, August 19th, 2018

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.

Terry

Monolithic Power Systems (MPWR) Poised to Break to Record Highs

There have been some recent price target upgrades for MPWR that suggest the stock still has some further upside.  Here are two of them – Monolithic Power Systems (MPWR) PT raised to $155 at Needham & Company and Brokerages Set Monolithic Power Systems, Inc. (MPWR) PT at $148.38.

The daily chart for MPWR shows three attempts at upside resistance found near $142.  As triple top patterns are rare, even more so with strong uptrends like the one seen in MPWR, and upside break appears highly likely.  As well, often stop losses get accumulated above notable horizontal levels.  Once triggered, these stops provide fuel for a momentum-driven rally.  The stock looks to be well supported as it recently recovered back above its 50-day moving average following a brief correction and has been consolidating in a range between prior highs and the 50 DMA.

MPWR Chart August 2018

MPWR Chart August 2018

*source Tradingview.com

If you agree there’s further upside ahead for MPWR, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open MPWR 21SEP18 135 Puts (MPWR180921P135)
Sell To Open MPWR 21SEP18 140 Puts (MPWR180921P140) for a credit of $1.68 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when MPWR was trading near $142.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $165.50 and your broker would charge a $500 maintenance fee, making your investment $334.50 ($500 – $165.50).  If MPWR closes at any price above $140 on September 21, both options would expire worthless, and your return on the spread would be 50% (570% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 16, 2018

IBD Underlying Updates August 16, 2018

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

Match Group (MTCH) Surges to Record Highs, What’s Next?

Monday, August 13th, 2018

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.

Terry

Match Group (MTCH) Surges to Record Highs, What’s Next?

Match Group broke to record highs in the past week and several analysts believe there is more upside, here are two of them – Match Group Is Still Undervalued and Wall Street is Falling in Love With Match Stock.

The main focus from a technical perspective is the upside momentum triggered by the recent earnings beat.  MTCH climbed above major resistance that is found between $47.00 and $48.65 to trade to record highs.  Recall that the stock traded in this resistance area ahead of the steep fall on news of Facebook launching a new dating service at the start of May.  In the process of breaking to new highs, a succession of higher highs and lower highs has materialized from the May low.  As often seen, the prior resistance area is now considered strong support, suggesting that dips in the stock will be short-lived.

MTCH Chart August 2018

MTCH Chart August 2018

*source Tradingview.com

If you agree there’s further upside ahead for MTCH, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open MTCH 21SEP18 47 Puts (MTCH180821P47)
Sell To Open MTCH 21SEP18 50 Puts (MTCH180821P50) for a credit of $1.03 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when MTCH was trading near $51.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $100.50 and your broker would charge a $300 maintenance fee, making your investment $199.50 ($300 – $100.50).  If MTCH closes at any price above $50 on September 21, both options would expire worthless, and your return on the spread would be 50% (468% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 9, 2018

IBD Underlying Updates August 9, 2018

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

Globus Medical (GMED) Offers an Appealing Entry Point

Sunday, August 5th, 2018

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.

Terry

Globus Medical (GMED) Offers an Appealing Entry Point

Several analysts are looking for more upside in GMED, take a look at these two analysts who have recently revised up their upside targets – Oppenheimer Analysts Give Globus Medical a $57.00 Price Target and Let’s Make Some Money With Globus Medical.

From a technical perspective, GMED is seen pulling back in the past few sessions to a well-respected horizontal level found at $52.35.  The level has previously acted as both resistance and support, including during a gap down in June.  In addition to the horizontal level, the 200-day moving average is in play and held the stock higher on a dip late in the week.

GMED Chart August 2018

GMED Chart August 2018

*source Tradingview.com

If you agree there’s further upside ahead for GMED, consider this trade which is a bet that the stock will continue to advance over the next seven weeks, or at least not decline very much.

Buy To Open GMED 21SEP18 50 Puts (GMED180921P50)
Sell To Open GMED 21SEP18 52.5 Puts (GMED180921P52.5) for a credit of $0.89 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when GMED was trading near $52.50.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $86.50 and your broker would charge a $250 maintenance fee, making your investment $163.50 ($250 – $86.50).  If GMED closes at any price above $52.50 on September 21, both options would expire worthless, and your return on the spread would be 53% (403% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 2, 2018

IBD Underlying Updates August 2, 2018

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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I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins