In last Monday’s letter, I said,
“As difficult as it is to believe that this market is going to make a decisive move in a direction, the price action last week is telling us that the markets are going higher.
There is no market environment more difficult than this type we are experiencing at this time. That isn’t to say that this one is the most difficult.
Any market, commodity, currency or individual stock that is whipping back and forth in a consolidation is difficult to trade. Of course, standing aside is an option.
That being said, if we do not take opportunities in the direction of a meaningful reversal like the one seen last week, we will get left behind.
It’s not easy to trust that Mr. Schizophrenic isn’t going to whipsaw us again, but after multiple plunges down toward major support and prices reversing back up again, I believe that the weight of the evidence is on the bullish side.”
The markets and many stocks moved higher as we believed that they would. Now, most are at prior resistance and short-term extended.
We will review this in the broader markets video.
While the energy sector was the one most in the news last week, the best performer was actually the Solar sector. Our trade in SolarEdge (SEDG) last week was a big mover in the sector and hit all-time highs.
The Solar sector ETF symbol TAN looks poised to go higher, but we want to see how it reacts this week before considering a long position in it.
BROADER MARKETS VIDEO
[s3mv fileName=’May+Letters+2018/BroaderMarkets_5_14_18.mp4′ fileType=’video’ source=’s3′ width=’800′ height=’450′ splashImage=” preLoad=’Y’ autoPlay=’N’ belowVideoHTML=” cuePoint=” redirectURL=” pauseAtCuePoint=’N’ isSecure=’Y’ bucketname=”]
NEW STOCK TRADING IDEAS
Below is a daily chart of The Goldman Sachs Group, Inc. (GS).
Trade: Under $241.71, consider shorting the stock.
Technical Setup: Master Trader Sell Setup at 200-MA and Minor Resistance daily, relative weakness to market and sector.
Stop Loss: $245.43.
Below is a daily chart of Teradyne, Inc. (TER).
Trade: Under $36.09, consider shorting the stock.
Technical Setup: Master Trader Sell Setup at d20-MA after bear pro gap daily, relative weakness to market and sector.
Stop Loss: $37.09.
Below is a daily chart of Raytheon Company (RTN).
Trade: Under $212.00, consider shorting the stock.
Technical Setup: Master Trader Sell Setup at d20/50-MA daily.
Stop Loss: $214.45.
BBY (Weekly)
We will be watching for Breakout after expected market retracement.
NEW OPTION TRADING IDEAS
Below is a daily chart of SPDR S&P Biotech ETF (XBI).
Trade: Over $91.74 or the 30-Min. high, consider shorting Jun (6/15) $85/77 bull put credit spread (33 DTE) for mid-point but a limit of $.66/share (closed at $.69/share).
Technical Setup: Bullish engulfing after breakout from Bullish W-Formation at r200-MA daily, bullish weekly and monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $85.30.
Below is a daily chart of Biogen Inc. (BIIB).
Trade: Over $283.59 or the 30-Min. high, consider shorting Jun (6/15) $255/240 bull put credit spread (33 DTE) for mid-point but a limit of $1.00/share (closed at $1.05/share).
Technical Setup: Breakout from multi-week consolidation at converging and r20/50-MA after Breakdown Failure on daily, bullish engulfing weekly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $264.88.
Master Trader Weekly Lessons for Investors and Traders will build your investing and trading knowledge and confidence to profit in all markets! Learn valuable education on stocks and options; basic to advanced chart analysis and technical strategies; the professional investor’s mindset and approach to the markets; Master Trader risk management techniques, etc. Each one can change your financial future! Sign up at www.MasterTrader.com/Lessons — only $11.97/month!
Thank you for being a loyal subscriber and feel to email us with any questions or comments on anything.
Access Trading Credit Spreads Course here, it’s the best $97 dollars spent to get up to speed fast.
Master Trader and You Building Your Financial Future Together
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director of Master Trader
Trading the Pristine Method — Origin and End
Dan Gibby
Chief Options Strategist
Follow Greg on Twitter, YouTube, and StockTwits to get real-time updates and education:
Twitter: @GregCapra
Stocktwits: Greg_Capra
youtube.com/c/mastertrader (please subscribe to receive all the timely stock market updates)
NOTE: Master Trader will show opening and closing prices of all stock and options trades. We recommend that all traders and investors use proper share sizing for positions and money management. However, we cannot recommend what that is for your particular trading style, risk tolerance, or account balance.
We urge you to calculate your own share/position size based on your individualized risk parameters, Trading Plan, and familiarity with the proposed trade strategy and risk. Advanced Management Strategies (AMS) covers in detail the foundational to advanced position and money management that Master Trader uses.
NOTE: Master Trader and its representatives may have existing positions in actual or other trade recommendations before or after suggested herein. Additionally, we may manage them differently for internal purposes based on different risk parameters than noted herein.
All trade ideas and content are for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, option or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds. Investment or trading information provided may not be appropriate for all investors, and is provided without respect to individual financial sophistication, financial situation, investing time horizon or risk tolerance. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. Master Trader Consulting, Inc. is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardize Options and the Risk Disclosure for Futures and Options found here: CLICK HERE.
