Trading Diary: July 21st – July 25th

by Enis July 27, 2014 6:55 pm • Commentary

Here is a quick recap of all of the trades that we initiated, closed, managed, expired and considered (Name That Trades) in the week that was July 21st – July 25th:

Monday July 21st:

Trade: WYNN ($201.50) Bought July 25th (weekly) 195 / Aug 16th 200 Put Diagonal for $5.50

Dan: This trade is down slightly even with the short weekly puts expired worthless. We’ll look to roll the short put side of this trade on any weakness this week. We like the way this structure is setting up for another retest of the 200 level. Earnings are the 29th of July.

Read here

Tuesday July 22nd:

Name That Trade – $AAPL Picking

Enis:  Laid out 3 different potential structures on AAPL depending the directional and volatility view.  All three structures emphasized that AAPL was unlikely to make a big move on the event given the fundamental and technical situation in the stock.  We expect AAPL to struggle near its all-time high of $100.72 in the coming weeks, though the strong earnings result might also support the stock and prevent a selloff of more than a few percent.  The iPhone 6 product announcement is expected in early September.

Read here

Wednesday July 23rd:

Name That Trade – $MON:  Technical Round-up

Enis:  MON broke out to a new 5 year high in May, which we discussed at the time in a Name That Trade post.  Monsanto had a strong earnings report in late June, and gapped to another new high, but has been in steady sell mode since then, primarily because of the weakness in the grains.  Corn, wheat, and soybeans have hit new lows in recent weeks, and future estimates of agricultural spending have come down as a result.  The stock broke back below the $117.50 technical level, which is an important spot to watch going forward.

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Name That Trade – $QCOM:  Phone Home

CC: We wrote some ideas on how we would play the thought of QCOM not outperforming its expected move and it did just that. After the move we actually made a bullish bet for the stock to hold on an important support level and possibly work higher over the next few months (see below)

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Thursday July 24th:

Name That Trade – $FCX:  Copper Topped

Enis:  FCX broke out above $38 in July to a new 52 week high.  However, on July 24, FCX gapped back below that level after a downgrade from Bank of America.  Some analysts have also expressed concerns about the uncertainty surrounding the new Indonesian government policy after the recent elections.  FCX is certainly on the cheap end of the spectrum when it comes to overall valuation, and looks attractive if copper prices remain bid in the coming months.

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TRADE – Bought to open the QCOM ($76.20) Oct 77.50 calls for 1.65

CC: QCOM’s fairly sharp earnings sell-off was in large part related to the troubles they are having in enforcing their royalties in China. This could in fact be a long term issue for the company as they spent a good portion of their time in the 90’s and 2000’s in similar battles elsewhere. Despite that, the stock has tended to hold support levels over the past few years and we’re looking for similar in this spot. Any break from here and we’d likely take the trade off for a small loss. Any move higher and we’d likely take the trade off for a profit or spread if the stock looks strong.

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Friday July 25th:

Considering Our Options – $WYNN:  Thoughts Ahead of Earnings on July 29

Enis:  We put on the WYNN trade on Monday with the thought that the stock was liable to break below the 200 day ma, now around $200, at any moment.  The stock held above there throughout the week, though its selloff in the second half of the week also set a lower high.  WYNN reports earnings before the open on July 29, and we might adjust the Aug16th 200 put position that remains (after the short put leg expired) on Monday, July 28.

Read here