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April 20th Daily Market Comments

As somewhat anticipated, the markets are continuing to consolidate back to the support levels of the 50 day moving average and the T-line. The uptrend remains in progress as long as the indexes stay above the T-line. These are type of days where the uptrend remains in progress but profit-taking is occurring, making the analysis of each individual stock chart more important. Continue to stay predominantly long. … [Read More...]

Trending Stocks: DVN, FSLR, ISRG

Devon Energy (DVN)Chart for DVNOver the next 13 weeks, Devon Energy has on average historically risen by 7.5% based on the past 29 years of stock performance.Devon Energy has risen higher by an average 7.5% in 20 of those 29 years over the subsequent 13 week period,corresponding to a historical probability of 68%The holding period that leads to the greatest annualized return for Devon Energy, based on historical prices, is 4 weeks. Should Devon Energy stock move in the future similarly to its average historical movement over this duration, an annualized return of 67% could result.First Solar (FSLR)Chart for FSLROver the next 13 weeks, First Solar has on average historically risen by 8.9% based on the past 11 years of stock performance.First Solar has risen higher by an average 8.9% in 4 of those 11 years over the subsequent 13 week period,corresponding to a historical probability of 36%The holding period that leads to the greatest annualized return for First Solar, based on historical prices, is 1 week. Should First Solar stock move in the future similarly to its average historical movement over this duration, an annualized return of 144% could result.ISRG (ISRG)Chart for ISRGOver the next 13 weeks, ISRG has on average historically risen by 16.1% based on the past 17 years of stock performance.ISRG has risen higher by an average 16.1% in 10 of those 17 years over the subsequent 13 week period,corresponding to a historical probability of 58%The holding period that leads to the greatest annualized return for ISRG, based on historical prices, is 12 weeks. Should ISRG stock move in the future similarly to its average historical movement over this duration, an annualized return of 74% could result. … [Read More...]

Slow Curve & Fry Pan Bottom Patterns Workshop Replay

"Top Patterns Working in Today's Market Conditions" 4-hour Online Training Workshop - Saturday, June 2nd, 2018 Click here for more information.   … [Read More...]

April 19th Daily Market Comments

Why is today looking like a consolidation day? Many uptrending stocks are pulling back but they are not doing candlestick reversal signals. That indicates there is no major change of investor sentiment in those trends, merely profit-taking. It would not be unexpected to see the indexes come back and test the 50 day moving average to see if it is going to act as support. These are the type of days were all you can do is sit through the day waiting for the continuation of the overall trend. … [Read More...]

When to Sell: It’s No Longer  the Hardest Decision

When to Sell: It's No Longer the Hardest Decision By Bill Johnson It's often said the hardest decision an investor must make is when to sell. Sell too soon, and you miss out on a potentially skyrocketing stock price. Sell too late, and you could sink with the ship. Buying is easy; selling is difficult. However, options can make the difficult challenge of selling a thing of the past. It's done with a strategy called a stock swap. Here's how it works. Let's say you purchased 500 shares of stock at $45 and it's now trading for $56. You think the stock will continue higher, but at the same time, don't want to see your gains turn to losses. The most common approach investors take when faced with this dilemma is to sell the stock and look for another opportunity. The problem with this approach is that the new stock you pick is equally likely end up heading south as the one you currently own. If you always try to sell your stock at the top and look for another to buy at the bottom, you'll end up generating a ton of commissions and probably be worse off than if you had just stuck with the original company in the first place. Trends last longer than people expect, and the better approach is to hedge your position and get your money back – plus a return – and maintain the position. That's what hedging is all about. Protecting Profits with Stock Swaps The underlying stock is $56 and the following option quotes are available: To enter the stock swap, sell your shares of stock and simultaneously replace them with a share-equivalent number of call options. In this example, you may sell 500 shares of stock at $56 and simultaneously buy five $55 calls for $3.38. The net credit is $52.62 per share: Sell 500 shares at $56 Buy 5 $55 calls at $3.38 Net credit = $52.62 The effect of this hedge is that you've swapped your shares for a call option - and collected a net credit of $52.62, or $26,310 for 500 shares, which is sitting safely in cash. Your original purchase … [Read More...]