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

+142% in 2 Weeks, Here’s Luckin At You, 2020!

Price chart of Luckin Coffee

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline Update, FYI:

Our Luckin Coffee (LK) March $31 call recommendation (see 12-15-19 Options Hotline), triggered 12-16-19 at $5.00, traded 12-31-19 at $12.10,

+142% in just over 2 weeks,

with an always known and strictly limited risk!

See my chart above for Superleverage on display.

As we enter our 31st year of publication, I can’t guarantee that all my recos will become multipliers.  But I do promise to do my best to find option winners for our great subscribers.

If this is the kind of options action you’re looking for, subscribe to Options Hotline today.

Best regards,

Steve

Hey, Good Luckin, +94% In Less Than 2 Weeks!

chart of Luckin Coffee

Chart by Steven Sarnoff h/t stockcharts.com

Options Hotline Update, FYI:

Our Luckin Coffee (LK) March $31 call recommendation (see 12-15-19 Options Hotline), triggered 12-16-19 at $5.00, traded 12-27-19 at $9.70,

+94% in less than 2 weeks,

with an always known and strictly limited risk!

I can’t guarantee all my recos will do this well; but, as we approach our 31st year of publication, I do promise to do my best to find options winners for my great subscribers.

If this is the kind of options action you’re looking for, subscribe to Options Hotline today!

We wish you and yours a Happy and Healthy New Year!

Steve

 

Happy Holidays!

All of us at Options Hotline wish you and yours very Happy Holidays!

NOTE: Next broadcast for subscribers is scheduled for Sunday, January 5th.  We’re set to begin our 31st year of publication!

The Superleverage power of our method is on display, as we head into the holiday break.

Today’s new highs, FYI:

Luckin Coffee (LK) March $31 call, triggered at $5.00, traded at $8.00, +60% in a week

and

Coeur Mining (CDE) January $5 call, triggered at $.75, traded at $2.70, +260% in less than 2 months,

with an always known and strictly limited risk!

If that’s the type of options action you’re looking for, subscribe to Options Hotline today to vie for fun and profit.

Many thanks and best regards,

Steve

Luckin Good

Luckin price chart

Chart by Steven Sarnoff, h/t stockcharts.com

At the opening of trading on Monday, Options Hotline subscribers positioned for profit with calls on Luckin Coffee (LK).  They received my weekly email bulletin, containing our specific recommended play on the Chinese coffee giant the Sunday evening before.

Their options already traded +30%, with shares tracing out a potentially bullish continuation pattern.  This implies the likelihood, but not the certainty, of a coming move higher.

The red candles on my daily Japanese candlestick chart above look lit to launch another leg up and seriously squeeze the shorts.

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

Best regards,

Steve