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Posts Tagged ‘IBD’

Is SVB Financial Group (SIVB) Ready To Continue Higher After The Price Correction?

Monday, October 23rd, 2017

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 portfolios to identify outperforming stocks and place spreads that take advantage of the underlying trend and momentum.

I did want you to know that the 10 actual option portfolios carried out at Terry’s Tips  for paying subscribers reached an important milestone this week.  These portfolios use a variety of pre-determined options strategies and differing underlying stocks or ETPs.  If you had invested in all 10 portfolios in January 2017, you would have invested $48,600.  This week, the composite value of those portfolios reached $97,742, a gain of 101%.  For the first time, we are up 100% for the year.  A milestone to celebrate!  Isn’t it time that you learned how we did it so that you could enjoy these kinds of returns in your own investment account?

Terry

Is SVB Financial Group (SIVB) Ready To Continue Higher After The Price Correction?

SIVB recently broke higher from a correction that had taken place since March.  The stock price started trending higher in late September and made a series of technical breaks by regaining its 200-period daily moving average and breaking above a declining trend channel that had encompassed the roughly six-month correction.

SIVB corrected lower last week following the technical break but turned higher after retesting the broken trend channel, slightly ahead of the 200-period daily moving average.  The stock price ended the week near 189.50 after a gap higher inspired by the earnings report, taking out resistance at 186.09 which was a hurdle in May and August.  The trend channel which is found on a daily chart resembles a flag pattern and the recent upside break signals a bullish continuation.

SIVB Chart October 2017

SIVB Chart October 2017

*source Tradingview.com
If you agree there’s further upside ahead for SVB Financial Group, consider this trade which is a bet that the stock will continue to advance at least a little bit over the next four weeks.

Buy To Open SIVB 17Nov17 185 Puts (SIVB171117P185)
Sell To Open SIVB 17Nov17 190 Puts (SIVB171117P190) for a credit of $2.08 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when SIVB was trading near $189.50.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $206 and your broker would charge a $500 maintenance fee, making your investment $294 ($500 – $206).  If SIVB closes at any price above $190 on November 17, 2017, both options would expire worthless, and your return on the spread would be 70% (1023% annualized).

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

IBD Underlying Updates October 19, 2017

IBD Underlying Updates October 19, 2017

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 the Nvidia (NVDA) Bull Run Continue?

Monday, October 9th, 2017

This week we are discussing another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to identify stocks with upward momentum and place spreads which will profit if the upward momentum continues for about four weeks.  Actually, the stock can even fall a little for the maxium gain to be made on these spreads.

The actual portfolios carried out for Terry’s Tips’s paying subscribers had another banner week, gaining an average of 4.7% while the market (SPY) rose 1.2%.  Our 10 portfolios have now gained 86.7% so far in 2017.  Options clearly can deliver extraordinary gains if they are set up properly.

Terry

Will the Nvidia (NVDA) Bull Run Continue?

Nvidia stock has gained significantly over the last year and several analysts believe there is further upside.  Here are two of them – Buy Nvidia, market’s hottest stock, on its gaming, A.I. prowess: Citi and 14% Upside Seen For Nvidia Shares On PC Gaming, Bitcoin Mining Strength.

From a technical perspective, NVDA has been rallying in a rising trend channel since early July.  There was a correction that took place late last month, however, the 20-day moving average as well as the lower bound of the rising channel held the stock price higher and continues to offer downside support.

 

NVDA Chart October 2017

NVDA Chart October 2017

*source Tradingview.com

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

Buy To Open NVDA 3Nov17 177.50 Puts (NVDA171103P17750)
Sell To Open NVDA 3Nov17 180.00 Puts (NVDA171103P18000) for a credit of $1.10 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when NVDA was trading near $181.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $108 and your broker would charge a $250 maintenance fee, making your investment $142 ($250 – $108).  If NVDA closes at any price above $180 on November 3, 2017, both options would expire worthless, and your return on the spread would be 76% (1110% annualized).

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

IBD Underlying Updates October 5, 2017

IBD Underlying Updates October 5, 2017

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

Cognex (CGNX) Is Set to Make New Records

Monday, August 14th, 2017

This week we are featuring a company that was recently added to the Investor’s Business Daily (IBD) Top 50 List.  The stock has displayed strong upwards momentum and we look to place spreads that take advantage of this underlying strength.

Terry

Cognex (CGNX) Is Set to Make New Records

Cognex reported earnings at the start of the month which led to a rally above a significant technical hurdle.  Cowen has since raised price targets to $135 and Zack’s equity research has written a compelling article outlining why they expect further upside in addition to rating the stock as a Strong Buy.

CGNX rallied to a record high after earnings, taking out a notable barrier from a horizontal level at $96.06 as well as the psychological $100.00 price point.  The horizontal level had previously held the stock lower on several attempts since early June.

The stock price has since corrected lower and over the past week the $100.00 level has held buyers to lift the price higher.  In the event the psychological level does not hold, support at $96.06 carries confluence with the 20-day moving average and a rising trendline that originates from a low posted in early July.

CGNX Chart August 2017

CGNX Chart August 2017

*source Tradingview.com

If you concur that Cognex has some further upside potential, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next five weeks.

Buy To Open CGNX 15SEP17 95 Puts (CGNX170915P140)
Sell To Open CGNX 15SEP17 100 Puts (CGNX170915P145) for a credit of $1.43 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CGNX was trading near $101.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $141 and your broker would charge a $500 maintenance fee, making your investment $359 ($500 – $141).  If CGNX closes at any price above $100 on September 15, 2017, both options would expire worthless, and your return on the spread would be 39% (408% annualized).

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

IBD Underlying Updates August 11, 2017

IBD Underlying Updates August 11, 2017

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

Macom Tech Solutions (MTSI) Surges to All-Time High, What’s Next?

Monday, July 24th, 2017

This week we are featuring a company listed on the Investor’s Business Daily (IBD) Top 50 List that broke to an all-time high in the past week.  In one of our portfolio’s, we use the IBD Top 50 List to find stocks that show strong upward momentum and place spreads which will profit if the upward momentum continues.  Actually, the stock can even fall a little for the maximum gain to be realized on these spreads.

Terry

Macom Tech Solutions (MTSI) Surges to All-Time High, What’s Next?

Macom Technology Solutions had its price target recently raised by Needham & Company and several firms have added to already sizeable positions.  Here are two of them-  First Trust Advisors LP Increases Stake in Macom Technology Solutions Holdings and FMR LLC Boosts Position in Macom Technology Solutions Holdings.

MTSI has been in an uptrend since late 2012 and broke to an all-time high in the past week.  The technical break followed an 8-week consolidation below a horizontal resistance level at $61.25 which is now viewed as strong support.  MTSI surged above the level on Thursday and held near its highs into the weekly close to offer confirmation of a sustained bullish break.

MTSI Chart July 2017

MTSI Chart July 2017

*source Tradingview.com

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

Buy To Open MTSI 18Aug17 55 Puts (MTSI170818P55)
Sell To Open MTSI 18Aug17 60 Puts (MTSI170818P60) for a credit of $1.18 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when MTSI was trading near $63.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $116 and your broker would charge a $500 maintenance fee, making your investment $384 ($500 – $116).  If MTSI closes at any price above $60 on August 18, 2017, both options would expire worthless, and your return on the spread would be 30% (395% annualized).

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

IBD Underlying Updates July 21, 2017

IBD Underlying Updates July 21, 2017

IBD Underlying Updates July 21, 2017

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.  The Terry’s Tips portfolio which places spreads like the above one has gained 113.5% so far in 2017 in spite of incurring some losses on some of the spreads placed.  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

Is Alibaba (BABA) Ready to Accelerate Higher?

Wednesday, June 21st, 2017

This week we are featuring an option trading idea based on a stock on the IBD Top 50 List that just delivered robust earnings guidance.  We have added this spread to the Terry’s Tips  portfolio which trades vertical credit put spreads on selected IBD Top 50 companies (this portfolio has gained 77% so far in 2017).

Terry

Is Alibaba (BABA) Ready to Accelerate Higher?

Alibaba, broke out to fresh all-time highs last week following better than expected financial results both on the top and bottom line.  Prices have been forming a bull flag pattern which is a pause that refreshes higher.

If you concur with the views expressed by these analysts, consider making this trade which is a bet that BABA will continue to advance (or at least not decline very much) over the next five weeks:

What impressed investors even more than the company’s financial result, was the company’s forward guidance. The Chinese e-commerce giant estimates that revenue will increase almost 50% in the 2018 fiscal year. Analysts had previously estimated a revenue increase of about 35%. In the wake of this news, the average price target was raised to $160 with the highest at $190.

Technicals

After a round of profit taking the stock should resume its climb.  The stock price has not closed below its 10-day moving average since February.  One way to bet on a further climb would be to put on a bull put credit spread where the short strike was below the 20-day moving average.  Support is seen near the 10-day moving average at $136.92.

 

BABA Chart June 2017

*source Stockcharts.com

Buy To Open BABA 21Jul17 133 puts (BABA170728P133)
Sell To Open BABA 21Jul17 136 puts (BABA170728P136) for a credit of $1.12 (selling a vertical)

This price was $0.03 less than the mid-point of the option spread when BABA was trading slightly above $139.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $2 per contract (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $110 and your broker would charge a $300 maintenance fee, making your investment $190 ($300 – $110).  If BABA closes at any price above $136 on July 28, 2017, both options would expire worthless, and your return on the spread would be 58% (603% annualized).

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