Hello everyone,
Today is June 14, 2014, It's a saturday and a nice sunny weekend here in Berlin. I'm going through some charts that I like to trade for next week as part of my weekend homework.
Lets take a look at the Macro economics. The economic calendar was light going into the weekend. Producer price index and UMich consumer sentiment were released Friday, before and after the market open respectively. Next week I'll be watching the markets as Industrial production and Housing Market Index data get released. And overall the whole sentiment to estimate if we will continue the bullpen or reverse and start a pullback.
Note: I'm a bull by nature, so my preference will always be bullish stocks. But I'm also trying to profit from the downside. I'll always take smaller trades if I short any stock.
The markets right now in my opinion are a little over extended. I won't try to call the top but I think we are due for a pullback. I also won't try to estimate how strong of a pullback. I'm just going to identify trades are are overbought and look to take short term trades against them. At the same time I'll identify bullish charts in the case of a continued run, that I can enter.
Looking at the S&P 500 chart. The market has been started a pullback after an extended rally, topping off at $196,05. Yesterday was a volatile day and the market closed almost undecided. So I'm looking for a continued move down and a retracement to 20MA @ $192.19. Second target would be $195.45.
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| $SPY Daily Chart |
1. $NFLX
This is my top pick for next week. Looking at the chart below, you can see $NFLX is overextended and curling. Indicators are pointing for a pullback.
Position: I entered this trade on Thursday, bought the $420 June 13 puts @ $2.35 and sold them friday @3.50 for a 50% win. Reentered that same day the $415 June 21 puts @ $5, currently down on this trade, but will be looking to average down if we get a confirmation next week or exit the trade if $NFLX breakout to the upside.
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| $NFLX Daily Chart |
2. $AAPL
Apple is by far my favourite stock to trade. Love the company and always have a bullish sentiment when trading the stock. After the announcement of last quarter earning, the increase of the share buyback, dividend hike and stock split, the stock has rallied significantly. I feel as with the market, Apple is due for a pullback. I'm looking to buy puts if we get a confirmation on Monday from the market. My target as shown on the chart would be the 20MA @ $90.10
Position: I actually entered a bullish bounce trade on Apple on Thursday. Bough the Jun 13 $92.14 calls @ 0.40$ and sold them @ $0.55. No other position in Apple right now.
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| $AAPL Daily Chart |
Bullish trades:
1. $BBY
BestBuy chart looks good. We had multiple gap downs because of news or earnings. BestBuy then consolidated (making higher lows) for several weeks in a channel shown in my chart below. It finally broke out of the channel to the upside, then quickly retraced back and now resistance became support. I'm looking to enter the trade for a move to $31.20.
Position: Position: No position yet but watching it closely.
17/06/2014 update: Bought $BBY Jul 19 $19 calls for $0.99, looking for a continuation of the bounce off support. Stop set at support.
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| $BBY Daily Chart |
2. $BAC
Bank of America filled the gap shown below, then retraced back to support @ $15.40. I would be looking for a bullish move if the market confirms it.
Position: No position yet but watching it closely.
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| $BAC Daily Chart |
I hope you guys like this, I plan to keep publishing more watch lists, so please subscribe/like/tweet if you found this interesting. Leave your comments and let me know if any of your trades work out for you or if you see something that I'm missing.
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