March 22, 2014 Weekend Review

Bflakaz Weekend Review

March 22, 2014

Recap of Previous Week's Trades

1. AAPL 510/550 short strangle: 5 spreads @ 1.15 3/18, now 0.67
2. NFLX 385/395/445/455 iron condor: 5 spreads @ 1.40 3/18, closed @ 1.39
3. Z long 100 shares @ 93.26 3/18, closed 100.12

Trade Setups for the Upcoming Week

1. DDD: Looks to be forming head and shoulders pattern. Wait for confirmation by solid close below support @ 55. Target 45 to 40 on short side. Only catch is 52wk lows on RSI and MACD, plus the price action on Friday's close shows that maybe this catches support here. Watch this through the week.

2. GILD: Many were calling the news and price action in GILD on Friday to be bursting of the “biotech bubble.” Maybe, maybe not. Price action was decent on Friday; bounce off lows faded into the afternoon. GILD is also showing 2 year lows on RSI and MACD, but I would not enter for a long position here. 200MA is around 67.5, watch the action around there. Don't try to catch falling knives. Very strong uptrend still very much intact.

3. TWTR: This was pinned to 50 for Friday's close from high open interest on the March 50 puts. This has seen 50 before and it proved good support. Seems like the trade is too easy though, be wary. Watch that 50 level.

Management of Current Trades

1. AAPL: Consolidation and more consolidation around 530. Short strangles and iron condors will remain safe around the 500-560 strikes for about another week, I'd estimate, based on prior consolidation periods. Planning to let θ collect over the weekend and take profits Monday or Tuesday. I'd watch for a straddle opportunity soon.

2. NFLX: Oh, Netflix. Escaped with a paltry $90 / $525 on the bull put spread and decided that consolidation would occur around 420 before moving lower. Not the case. That nasty candle is telling me that 400 is eminent, as I've predicted since the 420 break. If 400 doesn't hold then look out below. This looks nasty. Selling call spreads, buying puts, or shorting shares will be next if it breaks 400, if not, then stay away because this name can dupe you. Momo's are getting hit HARD!

Trade of the Week

Zillow (Z)

It's rare that a trade this perfect comes along. Z was range bound between 93 and 80 for the entirety of 2014. The most recent run up had a meaningful breakout close of 93.26, where I entered by buying 100 shares, with a stop at 92 and a price target below the old highs at 103. Z was marching to 100. I sold half the position the next day at 98.35, and the following day I sold 25 at 99 and 25 at 100.12 for a total profit of $569. Just a beautiful setup and perfect execution!

Decided against calls here; didn't see and good r/r setups with spreads, and deep ITM (Δ > .7) calls are just so expensive in Z, nor was I expecting the lightning fast run to 100, so the time frame for the calls was hard to determine.