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Markets gave us a nice Easter holiday gift yesterday. After coming back from a three day weekend we saw another green day for technology stocks. Now, I think that we can officially say that buying the dip paid off. Let it be a lesson for us that sometimes we need to take a step back and put on our noise cancelling headphones.
My portfolio is up almost 6%, or $40,000. I will start raising capital and selling some positions in order to reduce the margin that I used to buy the dip.
There are a lot of indices, ETFs and stocks that are now trading above the 50 day MA on the day chart. Most broke the 50MA last Thursday, but now the super trend has flipped to bullish. For most things tech related if you were dollar cost averaging during this dip, you should already be ahead. I am only one good tech day away from being at ATH for my portfolio.
Monday was the first day for traders to react to the blowout job report from Friday, which was a holiday. It was a lot better than expected, and the $TNX stayed mostly flat at around 1.7%.
Recap of the March Jobs Report:
Change in non-farm payrolls: +916,000 vs. +660,000 expected and a revised +468,000 in February
Unemployment rate: 6.0% vs. 6.0% expected and 6.2% in February
Average hourly earnings, month-over-month: -0.1% vs. +0.1% expected and a revised +0.3% in February
Average hourly earnings, year-over-year: 4.2% vs. +4.5% expected and a revised +5.2% in February
"There have been a lot of false narratives out there that interest rates were going to take the markets lower, that inflation was going to scare the markets, the Fed, and the realization is that, the economy is doing very well," Larry Adam, Raymond James chief investment officer. I think people are going to continue to see the strength of this economy during the summer, and you're going to see earnings continue to move up significantly throughout this year."
The US economy looks very strong, and has a bright future through the end of this year. There might be some cool offs, but I expect us to finish out stronger than ever as if we are in the roaring '20s.
$TSLA: This EV company crushed Wall Street's estimates on deliveries and Wedbush raised the price target. “In our opinion the 1Q delivery numbers released on Friday was a paradigm changer and shows that the pent-up demand globally for Tesla's Model 3/Y is hitting its next stage of growth as part of a global green tidal wave underway,” the 5-star analyst said. Tesla delivered 184,800 vehicles in Q1, compared to the Street's 172,230 forecast. Just imagine when the Model 2 debuts at the Guangdong auto show at the end of this year. I've been preaching for a while to buy Tesla during the dip and it is starting to pay off, however there is a long way to go to their $1000 price target, and my $1200 target. With their Model 2 and FSD in sights, the hype train is most likely departing the station (once again) later this year. Long, dated calls or vertical spreads are useful here; buy them while it is still under the 50MA.
Target Price: $1200
Timeframe: 3-5 months
$FB: All FAANG stocks broke out on Monday, but I like Facebook the best right now. Their P/E of $27 puts $FB as the best deal among the FAANG stocks and $FB did very well during this tech dip. Not only this but, on Monday, the social media giant announced Dynamic Ads for Streaming, a product that laser-targets the growing legion of streaming video service providers. "With Dynamic Ads for Streaming, when people see an ad for your service in their feed, they can swipe through the ad to see personalized, relevant titles they might be interested in, based on interests they've shown on Facebook and Instagram," the company wrote. Dynamic Ads for Streaming has a very limited advertiser base, even if it's growing. Still, it's an encouraging sign that Facebook is trying to stay one pace ahead of its rivals with a product that can be very useful to its target clientele.
If you are considering options, I'd do a $330/350 vertical spread dated sometime towards the end of the year. This should reduce downside enough where it won't be all that risky. If you have extra capital, LEAPS look interesting. Currently I have $AAPL LEAPS and don't need another FAANG long term option.
Target Price: $350
Timeframe: 2-4 months
Note: Risk (1 out of 5) is my opinion of how risky the stock and these plays are; 1 being the lowest and 5 is the highest.
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