April 4 Weekend Review

Bflakaz Weekend Review

April 5, 2014

Recap of Previous Week's Trades

There were no trades put on last week.

Management of Current Trades

There are no current positions.

Trade Setups for the Upcoming Week

GMCR

When I posted this idea earlier in the week, I was waiting to go long off support from the 50MA. Well things got ugly Friday after the jobs data and GMCR closed well below the 50MA. Now I'm looking to go short this stock next week. The bottom Bollinger band may provide some support, but I think it will get plowed through. Short target at the 100MA @ 88.88, but this will probably continue to sell off to the 200MA and fill the gap afterwards.

LEN

LEN wanted to fly higher on Friday but the market at-large eventually brought this thing back to close slightly lower on the day. We were talking up 2.5% that continued to wane down as the day went on. This thing wants to go higher; it blew through the 50MA resistance. Bullish cross on MACD is a buy signal. Looking to go long JUN13 calls next week.

STX

STX, like LEN, also wanted to go higher on Friday, but the tech sell off hit this name hard, closing down over 2%. I'm doubting that there will be a bullish engulf on Monday, but I'm not certain about a short play either. The opportunity here comes after it closes above that gap fill resistance. It's on the radar.

AAPL

Friday's tech sell off even hit "Tech Utilities" like AAPL on Friday, which is good for me. AAPL is right back into that 'goldilocks' zone of around 530, which means an iron condor spread could be a potential money maker. I haven't chosen the strikes yet, but I'll be searching for strikes with a Delta of at most .25/-.25 to make the trade.

NFLX

NFLX again?! Yes, again. The bearish sentiment in this name hasn't been this bad since the great sell-off of 2011, when NFLX fell from its previous highs of $300 all the way to $50 in just a few months. Times have changed, and NFLX is twice the company it was then. The fundamentals are much sounder... in the near term. Problems down the road? Yes. For now, my eye is on the 200MA - the make or break point of inflection. The trade opportunity here is an earnings play. Buying some calls in an anticipation for this thing to fly higher and flush shorts after earnings is what I may plan to do. April 21 is earnings, a profit of 0.81 per share is expected.

Some Side Notes

The second quarter has ended, so now it's time for earnings season. Here are some dates:

1. GMCR: May 5, 0.95
2. LEN: June 23, 0.52
3. STX: April 29, 1.25
4. AAPL: April 23, 10.44
5. NFLX: April 21, 0.81

The market at-large I think will steadily drift higher even though QE is coming to an end. It takes time for a change in monetary policy to hit markets, at least a few months. With the end of QE on the horizon, many over-vauled momo names will come back to earth in terms of P/E multiples. Safe, dividend paying names will become priority, but finding low P/E names in a broadly over-valued market will be tough. As a result, the indices are likely to take a hit in the coming months, probably in the Summer.