It is undeniable that the current market environment is rapidly weeding out companies that cannot survive in a digital world, and handsomely rewarding those that can.
And it isn't always the super high tech, VC-backed, trendy startup company that benefits. There are plenty of "old-school" names positioning themselves for the new reality of commerce in our new world. Thankfully, we don't need to be "futurists" who can predict the future of social, economic, and government trends. All we need to do is keep a careful eye on where investors are allocating capital and the resulting price action tells us everything we need to know.
Our trade idea today is in one of those old school retailers that's reinventing itself in new school ways.
All Star Charts held its Monthly Conference Call last night, and the overriding theme for U.S. Stocks is: we're likely going higher. And JC shared a bevy of stocks with charts supporting high prices in the near future.
Of course technology is on the radar, and the software sector is offering a wide selection of names to choose from.
As the U.S. continues to deal with the Coronavirus situation, it makes sense that stocks in the healthcare space should be doing well. There's a lot of attention and investment happening here to help deal with the calamity and prevent future spread.
Of course, as traders we don't need to read the headlines to know this. Following price and charts tells us everything we need to know.
One of our favorite names in the space is setting up nicely and it's time for us to get involved.
JC published a piece on Monday highlighting the rotation we're seeing into Transportation stocks. A bunch of names on that list have already experienced some good moves. But one of the names is likely to start playing catch up and that has me interested.
The team published a piece last week highlighting a bunch of setups in the Natural Gas space. A few of these stocks are already pretty extended due to recent moves, but I've found that one of them still has a lot of meat left on the bone and we can get into it with some cheap call options.
I'm on vacation and trying to stay away from the screens as much as possible this week, but you broke out on Wednesday and today you're just hanging there, baiting me into getting involved.
Anyone who traded in the late 90's only referred to Microsoft stock as "Mister Softee." It was stupid, as many stock nicknames were, but that's what it was. And you seemingly couldn't go a day without hearing "Mister Softee is making new highs!" from summer 1998 until early 2000.
I almost have PTSD from it.
Fast forward to today. Microsoft doesn't get the same media attention today as it did back then, now being overshadowed by the Amazons, Facebooks, Googles, Apples, and Teslas, of the world. But the price action is definitely giving me flashbacks.
And the ASC research team has a gaudy 323 price target for Microsoft $MSFT over the next several months which has me interested in playing along with options.
As August gets under way, it’s time to review positions with August options that remain open (haven’t already hit profit targets or been stopped out).
Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.