Well, since we're all stuck at home for the foreseeable future, we might as well spend some money on making "home" the best we can make it. Those long dormant "some day" projects that have been rattling around our brains all seem to be taking on a smidge more importance these days.
Americans seem to be getting back to work -- at home, ON the home. The chart of Home Depot $HD share price certainly bares this out as we're currently hanging out at levels above the pre-coronavirus selloff:
In the most recent ASC Monthly Conference Call, JC was bullish on Slack Technologies, $WORK. So, it's time to get to work on today's pullback and take advantage of the opportunity to participate at better prices.
Bullish internet stocks continues to be a theme that interests me. Regardless of your political affiliation or taste for conspiracy theories, the effects of the pandemic are still being felt and life doesn't appear to be getting back to "normal" any time soon.
This means many people still need ways to find ways to shop and entertain themselves at home.
In the latest monthly conference call for All Star Charts subscribers, JC highlighted some stocks in the internet sector that should continue to benefit in this tape. Does the story help? Sure, but more importantly the charts are telling the real story.
If you believe the longer-term uptrend is still in tact, then you have to love opportunities to buy on the dip during market pullbacks.
And the best place to look for these dips is in the strongest sectors that have been leading us higher since the depths of March. The software sector is in my sights today.
In a recent post on Chinese Internet stocks, the team laid out the bullish case for why many of these names look set up to run. Since publishing this post, many of the names discussed have indeed begun breaking out higher.
And one of the names with a pretty impressive base is looking like it's about ready to join it's friends.
I like to keep a few delta neutral trades active in the portfolio at all times (if I can). It's a good diversifier and also benefits from sleepy or sideways markets that tend to not help any of my directional trades.
So I regularly scan my list of the most active optionable ETFs to pick out the ones with the highest implied volatility and charts that look like the potential for sideways action setting up (ideally). And once again, for the 3rd month in a row, The utilities sector is standing out for me.
The last two strangles worked out. This time, we're gonna do a slightly different twist.
Last week, the guys published a bullish piece on Chinese internet stocks. Since then, a bunch of them have already taken off and I don't feel like chasing here. However, one name that wasn't mentioned is setting up for a potential "catch up" trade and the time feels right to jump in.
In the latest All Star Charts Monthly Conference Call, JC laid out a number of bullish trades. In the week or so since that call, a number of the stocks mentioned have since pulled back. Does that mean the trades are dead?
Not necessarily.
Nothing goes up in a straight line. And if you're a believer that our current pullback is just a result of sector rotation and a reload for a later resumption higher, then you've got to be a lover (as I am) of opportunities to enter the strongest stocks as they pause and/or pull back a bit.
With that in mind, we're putting a trade on in a Pharma stock that has the wind in it's sails.
Don't fight the tape. The markets are moving higher, whether we agree with it or not.
That said, we want to be long the strongest stocks. This is trendfollowing 101.
Last week, Steve Strazza put up a bunch of ideas in semiconductors which have been leading the way. Many are now breaking out so we're going to put on an options trade to take a jump into this trend.
Ok, I have to be honest here. I'm not incredibly bullish at these prices. As much as I try to divorce myself from the news cycle and the fundamentals, its hard to think NOW is the time to get long.
That said, only price pays, and charts and declining volatility in many stocks is telling different stories.
The beautiful thing is I can express bullish trades with options and clearly define my risk. Here's one that looks like a good risk reward:
In a recent blog post, JC highlighted some bullish stocks that he can simply no longer ignore. Regardless of whether or not we feel the upside may be close to exhausting itself in the broader markets, there are some setups that are screaming for attention.
