Each Saturday I review three of the recent trade ideas in the clubhouse:
The Why, The Trade, The Outcome
The end of May and beginning of June finally brought about the breakout in the S&P 500 above the 2400 area I had been discussing so much in recent weeks. Seasonality coupled with complacency and the need to chase stocks higher on the part of under performing fund managers finally cleared this hurdle. This resulted in plenty of breakouts in sectors and single name stocks that we gladly jumped on this week.
Here are three trades that I did and shared in the clubhouse…in review
Trade 1: Oil Services Stocks ETF (OIH)
The Why: Thursday May 25th was an ugly day for oil and oil related stocks which led to a technical breakdown and continuation lower of the year-to-date trend. Because I think oil and gold are some of the most difficult assets to trade, I opted to express my near term bearish view in oil services stocks as represented by the OIH etf.
The Trade: On Thursday May 25th I sent out a real time trade alert by text saying that I bought some July 27 strike puts for $0.97 and said that I would take profits if the etf drops to $26 per share.
The Outcome: On May 30th I took full profits in this trade as the OIH etf dropped to my $26 price target – I sold/closed the July 27 strike puts for $1.59. i.e. a 50% return. I sent out a real time text alert on this
Trade 2: (Weekly Spotlight Trade): Biotech ETF (IBB)
The Why: Earlier this week on Wednesday May 31st the IBB etf tried its best to break below the red 200 day simple moving average however by day’s end rallied back up and closed in the green for the day. This was followed yesterday Thursday by strong follow-through buying day to the tune of 1.80%. This led my B2 Reversal Indicator to flash a buy signal by marking the chart with a green up arrow.
To be clear, the IBB remain in a bigger picture consolidation phase but the B2 Bull Reversal does now look to target the etf toward $300 as a next upside price target. Last resort stop losses can be applied around the $284 mark on a daily closing basis.
The Trade: On Thursday June 1st I bought the July 290 – 300 bull call spread and sent out a text alert. One can also buy the stock. Next upside price target is $300.
The Outcome: So far the IBB etf has rallied well more than 2% from where I bought it and my bull call spread is nicely profitable.
Trade 3: Fedex (FDX)
The Why: On Thursday June 1st the transportation stocks and FDX staged a classic breakout of a multi-month consolidation phase.
The Trade: On June 1st I bought some FDX stock with a $201 price target and sent out a real time text alert.
The Outcome: On Friday June 2nd my first price target was reached and I took partial profits in the trade. Simple as that.