By Don Fanstone, Member Kitchener/Waterloo User Group
Earnings Season, Going With the Winners:
Earnings season is in full swing with winners and losers. Buying stocks (or options) on companies that continually increase their earnings and their sales is a good way to pick winners going forward.
Two suggestions going forward.
Apple: Apple had great earnings, but surprised investors by retreating in value. Were investors taking profits, or were speculators with short term option positions cutting their losses having expected good earnings and then being disappointed when the stock did not rise in value? I am personally aware of investors who rightly expected Apple to have blow-out earnings; and who were buying inexpensive at-the-money May 1st options with 4 days to expiry, expecting to earn short-term profits.
For whatever reason Apple dropped in price, it’s a fairly safe assumption that going forward, it will continue to be a dominant player in media equipment.
The ideal time to take a position is when there is a green light in the price column, the market is moving Up with an Up/Up condition, and Apple makes a new high, closing above $134.54. This eliminates all resistance, and the previous high becomes support. Buy October 120 Call Options.
Follow the stock price in “Star Search” If the price falls out of the upper quadrant, close the trade.
If the stock price falls below the simple 30 day moving average and the DPO turns negative, close the trade.
Skyworks: This Company is a supplier to Apple and has reported great earnings.
Buy November $90.00 Call Options at a close above $102.87, same conditions as noted above for Apple.
Watch Friday’s Special Presentation: A good explanation of Selling Covered Calls and Buying Protective Puts in this week’s Strategy of the week. Don’t miss it.
Sells for the Week of April 27:
Buys for the Week of April 27:
Options Courses. The VectorVest Basic Options course is available online.
The VectorVest Intermediate Options course is being offered on May 28th in Mississauga. Check the Views or call 1-888-658-7638 for the course description and pricing. It will soon also to be offered online.
I encourage all to read Lee Lowell’s book “Get Rich with Options”, go to VV University and watch the Video on Options, and read Dr. DiLiddo’s article in the Views Manager under Special Reports, and attend the VV Options Course.
Understand Options Before you begin to trade, there is much to learn.
DISCLAIMER: Options trading involves risk and is not suitable for everyone. The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. Options training is strongly recommended before placing any trades. VectorVest offers a basic options course online and occasional intermediate options workshops in Canada each year.