MU Shoo

Micron chart

Chart by Steven Sarnoff, h/t stockcharts.com

As you can see on our daily candlestick chart above, Micron (MU) shares look ready to leave their rally and head south.

The historic panic plunge in oil may grab the headlines, but it’s Tech shares that look terrible. 

The struggle is real, as Wall Street darlings like MU fade under the negative influence of a down trend.

We’re watching for a big test of underlying support (demand) in the low-$30s.  The negative character of the behavior of price movement is depicted by the appearance of consecutive black candle lines right at technical resistance (supply).

This indicates the likelihood, but not the certainty, of lower prices down the road.

Subscribe to Options Hotline today to stay a step ahead of the crowd as you vie for fun and profit.

Best regards,

Steve

h is for holy $#*!

Micron stock chart

Chart by Steven Sarnoff h/t stockcharts.com

Options Hotline reco update, FYI: +35% in a single session on our Micron puts!

Sensible speculators seek to buy options that will move from “out-of-the-money” to “in-the-money.”  That’s where the greatest gains are made and that’s what our most recent recommendation (see 03-31-20 Options Hotline) did today.

The Micron June $40 put triggered at $3.75 and subsequently traded as high as $5.05, +35% in a single session, with an always known and strictly limited risk!

As you can see on my daily candlestick chart above, Micron, appears to be tracing out a potential “h” pattern. That’s where price has a sharp decline, followed by a bounce that rolls over and points to a likely test of the recent lows.  This bearish price pattern closely resembles a lower case “h.”  It’s counterpart is the bullish “y” pattern.

We recommended puts on Micron, because the character of the behavior of MU’s share price turned negative at resistance (supply).  We are looking for a move toward secondary support (demand) in the low-$30s.  The price action moving forward will tell us a lot about who the stronger force (buyers or sellers) really is.

I can’t guarantee all my recos will get triggered on the low or go on to reach multiplier status, but I do promise to continue to do my best to find options winners for my great subscribers.

If this is the kind of options action you are looking for, subscribe today to stay a step ahead of the crowd.

Best regards,

Steve

Options Hotline Reco Update, FYI:

qqq chart

Chart by Steven Sarnoff, h/t stockcharts.com

+215% in a month and a half on our recommended QQQ March $215 put, with an always known and strictly limited risk!

Patience tends to pay.  In today’s session, another failed rebound attempt sent stocks sharply lower again.  We’re on watch for signs of a turn.  But, as you can see on my daily candlestick chart above, the very negative character of market price movement is pointing to the likelihood of lower prices ahead.

It was a rough day for many market participants, but not too shabby for our readers who used puts for protection.

Our recommended put option on the Nasdaq-100 index was triggered in mid-January at $4.29 and closed today at $13.50.

Subscribe to Options Hotline today to stay a step ahead of the crowd.

Best regards,

Steve

P.S.  Keep calm and wash your hands.

Your Almost Daily Bit of Wall Street Wit & Wisdom

“Embrace selloffs because that’s when the market gives you its best clues.”
— Joseph Fahmy, @jfahmy

Keeping your eyes open to developing divergence between the action of individual stocks and the market can provide powerful information.

If a stock is holding up well while all around are down sharply, that tells you something good.

Best regards,

Steve

Law of Gravity

spce chart

Chart by Steven Sarnoff, h/t stockcharts.com

Early today, shares of Virgin Galactic (SPCE) continued their rocket rise.

The SPCE April $20 call option I recommended to subscribers (see yesterday’s blog post and the 02-09-20 Options Hotline) for $2.50 reached a value of $18.72 today, +649% in a little over a week.

But markets don’t move in one direction.  Even though shares were up from Friday, the character of today’s price movement is actually negative.  See my chart above for today’s black candle line with an upper shadow.  That shows price falling from the high of the day and implies the likelihood of a coming move lower to levels of underlying support (demand).

It’s important to remember the law of gravity applies to markets.

If buyers are exhausted from a hyperbolic rise, SPCE will get burned on re-entry.

A wild ride, indeed.

Best regards,

Steve

 

 

Outta Space

spce chart

Chart by Steven Sarnoff, h/t stockcharts.com

I hope you’re all enjoying the Presidents’ Day holiday.

FYI: This past week, call options on Virgin Galactic quadrupled.

The header for my most-recent recommendation to our subscribers (see 02-09-20 Options Hotline) was, “Outta Space.”  It was a subtle tribute to Billy Preston’s funky 1971 instrumental track, which your then 13-year old editor saw him perform with the Rolling Stones during one of their 1975 shows at Madison Square Garden.

billy preston

Billy Preston, circa 1975

My idea was that shares of Virgin Galactic (SPCE) were set to launch another leg higher.  Here was my chart from that bulletin.

spce chart

Chart by Steven Sarnoff, h/t stockcharts.com

With SPCE at $18.93, the option I was eyeing closed $2.45 bid at $2.55. I recommended the SPCE April $20 call for $2.50 or less.  The option expiration date was April 17th.

As you can see on the chart at the top of this post, shares rocketed higher from my reco point A.  SPCE closed Friday at $28.68.

The low trade for my recommended option was $2.56, on Monday the 10th, so my recommended trade was not officially triggered.

I prefer using limit orders for entry, because you always know your risk.

The option closed Friday the 14th at $10.00, quite a Valentine’s gift for those who bought anyway.

By week’s end the Superleverage power, available only to option buyers, was on display.

Congrats to those who profited.  If you didn’t get it, don’t worry.

There’s always opportunity in options.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

Outsiders

h/t AP Photo / Warner Bros.

Look for options that are set to move from “out-of-the-money” to “in-the-money.”  That is where your greatest returns are made.

You should only trade options with risk capital (money you can afford to lose) and only if you understand options.

Out-of-the-money options have no intrinsic (real) value.  Their premium (price) is for time and volatility only.

In-the-money options have intrinsic value plus time value.

Now in our 31st year of publication, Options Hotline readers apply our Superleverage strategy to make great options gains from small stock moves, with an always known and completely limited risk.

Subscribe to Options Hotline today to stay a step ahead of the crowd.

Best regards,

Steve

+208% in Less Than a Month, Luckin Runs Out!

Luckin Coffee chart

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline reco update, FYI:

On Friday morning, our subscribers received an email Alert and had the opportunity to close out our recommended trade on Luckin Coffee (LK), more than tripling their money in less than a month!

Though it may go on to greater gains, our objective was achieved and we like to stay a step ahead of the crowd.

The Luckin March $31call triggered 12-16-19 at $5.00,

traded 01-10-20 at $15.40,

+208% in less than a month, with an always known and strictly limited risk!

I can’t guarantee that all my recos will have the good fortune to multiply like our Luckin play, but I do promise to continue to do my best to find options winners for my great subscribers.

My next bulletin is scheduled to broadcast this afternoon.  If this is the type of options action you’re looking for, subscribe to Options Hotline today.

Good luck in your trading!

Best regards,

Steve

+206% in Less Than a Month, A Good Luckin Move!

Luckin Coffee chart

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline Update, FYI:

Shorts are getting squeezed, as Luckin Coffee (LK) traces out a bullish price pattern.  Consecutive strong red candles (see my daily chart above) helped our recommended March $31 call triple in less than a month.

The LK March $31 call triggered 12-16-19 at $5.00,

traded 01-09-20 at $15.30,

+206% in less than a month, with an always known and strictly limited risk!

Now in our 31st year of publication, the Superleverage power of our method continues to light the way for sensible speculators.

I can’t guarantee that all my recos will multiply like LK, but I do promise to do my best to find options winners for my great subscribers.

Subscribe to Options Hotline today to stay a step ahead of the crowd.

Best regards,

Steve