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8 May 2017

Week of May 7th by Dan Bustamante of Landshark Education

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Post by Wesley Franco

The week ahead…

 

Earnings season is in full swing and in the last couple weeks we have seen a few of the big names like Amazon (AMZN), Apple (AAPL), Google (GOOGL) and Tesla (TSLA) all report.  Before we look ahead to next week’s earnings, the big news for this weekend is the French Election.

 

France is going to the polls and electing its countries, next President. Not to get into a politics we as retail traders are excited about the additional volatility that this is bringing us. We’ve seen some futures brokers increase their margin requirements over the weekend due to the election. The E-Mini S&P Futures all time high is 2401. We have a target area of 2395, 2401 (ATH) and 2406. On Friday we hit 2399.25.

In my opinion, a win for Macro, the market pushes higher and we break all time high but I think we’ve already priced in a Macro victory so a huge run up isn’t expected.

 

A win for Le Pen and the market goes lower. How low? Well, that depends but we have some levels listed in figure 2 below. I don’t believe we have a 5% limit down like we saw with Brexit because if Le Pen wins, the people will have to vote to leave the EU which she is in favor of doing.

S&P Futures Support levels (2383, 2375.5, 2369)

 

The increased volatility for the weekend should bring us some great trades this week. A few things I will be looking at for earnings.

 

Monday: HTZ has been beaten up lately and the weekly RSI is oversold.  As far as charts go, not a clean setup that I see. (Boing strategy is the trade)

 

Tuesday: VRX is interesting to see how they are post Bill Ackman. We purchased shares and naked puts after last earnings and still holding strong. Do we get a pop here? Again the weekly time frame has this oversold so let’s see how we play out. The big one on Tuesday will be Priceline (PCLN). This thing has been an absolute monster lately and earnings could see this reach a price of over $2,000.  NVDA will be another play that is currently in a PTA and at this point looks to be a nice post-earnings trade.

Wednesday we have Snap Chat Inc. Volatility is up and last week in the live room we bought various strikes in SNAP. The strike we chose were 22, 23 and 24s and you can see why based on the chart below (see fig.4). On Friday I sold the 23 and 24 strikes for profit and held on to the 22 strikes. I will hold these up to earnings and as Implied Volatility increases and sell them prior to earnings. We have a target area listed for earnings and if we hit that strike, it may be time for SNAP to pull back so we can get back in at a better price. Buy low, sell high right?!

 

SNAP TARGETS (22,23,24 STRIKES)

SNAP EARNINGS TARGET

Thursday and Friday have a few big names as well but nothing that I see worth playing at this time. If any reach a PTA I will revisit them and have alerts set.

 

Currently, I’m holding a few positions. ULTA has an upside target of 300. After breaking the ATH last week I got in and it’s been an explosive move up. Wal-Mart (WMT) broke it’s B pivot of $75.19 on the weekly and has been on an up move since. If we can clear a macro level of $77.75 we should be able to hit our target area of $80.

 

ULTA CHART

WMT CHART

Now, these are all some bullish moves and I don’t have any downside protection in my portfolio. So with the potential move in the market Sunday evening, if the market goes down I can hedge these positions by trading futures. I’ll look to short the ES and long the gold. The euro could be in play as well. If the market goes up, I’m in great shape on the options side and will increase profits by trading futures. This is the beauty of being able to trade futures and options.

 

We’ve started our Advanced Options course this weekend and runs all next week but we have Advanced Futures class starting May 15. To enroll or more information please email me at Ryan@LandsharkEducation.com I also invite you to join me 5 days a week in our live trade room. For $7 you can get a 14-day trial and see my screen as I trade live each day from 9am-12pm EST. To learn more about our live room go to www.LandsharkEducation.com/Membership Enjoy your weekend.