Monday, August 10, 2015

$CELG and $UHS - Plus My Targets For Credit Spread Trades

Is Fear Holding You Back?


Lately, every trade I place has turned on me or behaved out of the norm.  Even more frustrating, I've gotten stopped out, only to have the trade go the way I had planned, just a few sessions later! 


Naturally, I started to question my methods but when I talk to other traders, they seem to express the same frustrations. They tell me that they are fearful of placing trades and have just given up on the market for now. Some have even abandoned their process of screening for a proper watch list and setting up a trade plan.

That's a bad idea, though, because it dulls your edge and that will come back to haunt you when the market turns around.  Instead of giving up entirely, it's better to continue as-is but trade on a virtual account that doesn't put your real money at risk.  This is the best way to keep your skills sharp and learn from what's happening!


My Market Outlook


This earnings season has given us a lot of unpleasant surprises. Most of the bullish moves have been from a handful of stocks. Most growth stocks will make a 5% to 10% move, only to retrace to their buy points within just a couple of sessions. Most indices and sector ETF's are trading right around their 50 day simple moving averages (DMA) The $DOW is even worse and trading below the 200 DMA.  As a retail trader who trades very liquid growth stocks, I just don't want to be any where near the 50 DMA and certainly not the 200 DMA. That is a bearish territory for me.

Currently we have a very high distribution count. Last Friday at the close of session, we had all the sectors trading below or hovering around their resistance lines. The only sector that was holding ground was the Consumer Discretionary ($XLP)  Institutions were parking their monies in the tobacco, staples and pharmacy related companies. Most markets in the world are downtrending. Commodities like oil and mining materials along with precious metals are down trending too. This all points to a lack of global demand. It is best to be looking at stocks that are US centric.


What I'm Looking At


There are only 2 stocks that survived my funnel method this week. They are:


$CELG
$UHS

Last year, the month of August gave a return of +5.07% but most of the move occurred during the 2nd half.  I don't want my to fear hold me back from entering the market this week so I have prepared a target list of strong trending growth stocks for some low risk credit spread options. Here is what I'm looking at:

$NKE
$WBA
$FB
$CMG
$SBUX
$EQIX
$EBAY
$REGN
$NFLX
$AMZN

I prefer to wait on Monday until mid morning just to let the dust settle down. Any position I take will be small to start out with. I am mostly in cash right now and keeping my powder dry.

Good luck and Happy Trading!












DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.