Trade Ideas —$ROST, $CRM, $MU, $AMAT, $DE, $AAP
August 21, 2016
Need some trading ideas to get the week started? We’ve got you covered! This is our weekly issue August 22 — August 26 where we go over macro economics, economic calendar, upcoming earnings and list a few trade ideas.
In the US, eyes were on the Fed’s minutes and interviews, with economic slack decreasing and inflation remaining low. Industrial production was up and housing starts had an upside surprise.
Globally, Japan’s GDP was up a little while UK’s July sales rose surprisingly.
Stocks were volatile last week. $SPY continued its volatility since early August with a $217-$219 trading range. $USO continued its uptrend while related energy stocks fell some. $GLD had a volatile week with a $127.50–$129 trading range.
Information Technology and Materials led the industry gains last week. Energy, Telecommunication and Utilities led the losses. These industry performances still indicate the US to be in the mid-recovery phase of the economic cycle.
$ROST — Ross Stores Inc.
$ROST has been on a nice uptrend since late June. It reported an ER beat last week that caused a gap up in stock value. I expect some profit taking this week.
Catalyst: ER 8/18/16.
Trade: BUY $65.00 September 16, 2016 Puts.
$CRM — Salesforce.com, Inc.
Last week $CRM hit the 3-month resistance $76 and bounced upward for two days. Need more confirmation? ER is 8/29/16 and $CRM has a history of ER beats the past two years.
Catalyst: ER 8/29/16.
Trade: BUY $80.00 September 16, 2016 Calls.
$MU — Micron Technology, Inc.
Shhh, don’t tell anyone that Micron Technology has slowly been becoming less profitable with each ER. It’s sales are decreasing as well. But $MU has Ben on a tear with a few gap ups since mid-May. The chart analysis shows a 188 CCI, 45 +DM, and .69 MACD. Right before this extended uptrend $MU hit those technicals and fell.
Catalyst: Overbought territory.
Trade: BUY $16.00 September 16, 2016 Puts.
$AMAT — Applied Materials, Inc.
As expected, $AMAT beat ER expectations last week. Kudos if you traded Calls before ER. The stock’s value surged after ER placing the ticker at 341 CCI , 53 +DM, and .71 MACD. In the past two weeks $AMAT had beaten its $25 5-year high. Profit taking will set in soon. Yes, conservative option traders might want to wait for confirmation this 5-year resistance beat doesn’t trigger an extended uptrend. This week’s trading should be telling.
Catalyst: ER 8/18/16.
Trade: $29.00 September 16, 2016 Puts.
$DE — Deere & Company
$DE beat ER expectations in its biggest beat in awhile. Looking at the two year ER history one can see analysts have very low expectations to beat, but the company beat its 3rd quarter results from last year. Trading last Friday spiked the stock price to a 6-month resistance of $88 and the price settled below resistance unable to overcome. Calls were up 1,000–2,000%. My estimate is profit taking next week.
Catalyst: ER 8/19/16.
Trade: BUY $85.00 September 16, 2016 Puts.
$AAP — Advanced Auto Parts Inc.
$AAP does a particular pattern of trading after its past few ERs. It misses ER expectations, the ticker value falls for a few days and then the price rebounds after hitting oversold territory. June to July resistance was $157.50 and after trading last week this old resistance appears to be a possible support. Last ER the price fell $25 before rebounding to the start point to go even higher months later. This week’s trading will be important to see if support holds or investors start to catch on that quarterly comparison to prior year profit and sales shows weakness for the company ahead.
Catalyst: After ER 8/16/16.
Trade: BUY $160.00 September 16, 2016 Calls.
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This is not an investment advisory, and should not be used to make investment decisions. Information in All Things Stocks is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don’t consider buying or selling any stock without conducting your own due diligence.