Financials
IRBT Triangles UpdateMy guesses:
If the pattern holds, IRBT will turn down to around $102.09 before beginning an upswing again. The RSI is right for this scenario, and the anticipated drop in price before the earnings report on Oct. 23 would indicate a final drop within the next couple of days, followed by a holding pattern until earnings, before turning up.
However, I don't expect the pattern to hold. The reason I have a projection arc is because this pattern has gone on too long. There is a strong possibility that the stock will instead drop below $102.90, with a possible support at $94.36, as can be seen just before the triangles began. IRBT stock prices have been outperforming the industry for the last three months, so a market correction is a distinct possibility. They already released their latest new Roomba on September 9 and there has been no news of any new products. The consensus is that the stock will drop to around $80, but when is unknown.
My suggestion: Do not buy now
USDCAD Remains On The Offensive, Eyes 1.2950/99 Area USDCAD remains on the offensive following its second day of higher close on Thursday. As long as it trades and holds above the 1.2882 level, it leaves its recovery intact. Support lies at the 1.2900 level where a break will aim at the 1.2850 level. Further down, support comes in at the 1.2800 level where a turn lower may occur. Then further weakness aim at support located at the 1.2700 level. Conversely, resistance lies at the 1.2950 level where a violation will turn focus on the 1.3000 level. Further up, resistance resides at the 1.3050 level and then the 1.3100 level. All in all, USDCAD looks to strengthen further on corrective recovery.
$XLF bullish credit spreadNew bullish credit spread on XLF (financials) for OCT 12! Not this Friday. Solid movement this morning in the market and financials is starting to show strength. Decided to take this move out two weeks to allow for the bottom to confirm and some bullish movement to occur.
Entry 27.79
Max profit 28.50
Break even 28.14
0.38:1 risk/reward
$spx $spy $xlf Nice breakout in the financialsNice breakout in XLF the resistance has now become support.
C - Inverse Head and Shoulders breakout!Following some upbeat forecasts for the financial sector and with JP Morgan announcing a 43% dividend increase, financial stocks soared today. From my analysis of the sector, C appears to have the most bullish chart at the moment and should be a top pick in the financial sector at this time.
Today, C broke out of an inverse head and shoulders pattern. Inverse head and shoulders are among the most common and most reliable reversal patterns in technical analysis. With the breakout from the neckline, the pattern provides a price target equal to the size of the head from the neckline (the cloned and placed blue boxes). With multiple supports now below the current price and a price target of $82 it offers a fantastic risk/reward long play. This represents an 11% gain over today's close in the short term (~3 - 6 months). I entered a long equity position today. I think it is fairly likely that C re-tests the neckline, in which case I will be buying long call options if any re-test fails, or on any pullbacks to its price target.
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As always, the responsibility for managing your position is your own. I am not a financial adviser nor is any content in this post intended to be financial advice. The information presented is my opinion, based on tools I have learned from others sharing their opinions and my experience in the markets. I share these ideas to generate discussion and have others critique my analysis because, as always, I am still learning. With that in mind, the outcome could be quite different than what I am predicting and this is for entertainment purposes only. It should not be considered financial or investment advice of any kind. Readers should consult with a financial or investment professional to determine what may be best for their individual needs.
STI Break OutShares of regional bank SunTrust (STI) have recently broken out to new highs and looks to have some room to run further.
I'm jumping in via October 19 $77.5 calls (the $75's would be fine, too... a $75/$80 spread could help lower cost), as it takes me thru the next earnings report on Oct. 18. That said, I'll likely exit prior to the report to capture the increase in premiums that occurs leading in to an earnings release, as well as protect profits (assuming the trade works out as planned, of course).
US Equities Market Breakdown May Be Happening NowA little over a week ago I warned that the US Equities markets were setting up for a 5~8% pullback and that my custom indicators highlighted the potential that a weakened price rally would end in a potentially violent price decline. The last 4+ trading days have further highlighted my research that the price rally in the US Indicies was very weak and inefficient. Meaning, the market price was advancing on news/speculation that was counter to my other indicators - a false rally.
Now, as price is beginning to roll over, I would expect the violence to begin in earnest. Be prepared.. Don't wait for the move to happen, take precautions now. This is a long holiday weekend and trading could become very volatile early next week.
Remember, follow me if you like my research and visit my web site to learn how I can help you stay ahead of these markets. I don't post often, but when I do post you'll see the value in my analysis. I don't get caught up in the short term trends. My research is defined at identifying price moves 2~12 weeks in advance.
Watch out below. Prices in the US Equities markets are about to test lower support levels.
XLF - Falling wedge breakout buying opportunity**Market Structure**
-A falling wedge has broken
-Due to the price rise going into the wedge as well as the downward sloping nature of this wedge, that gives is a solidly bullish bias
-The overall markets have been bullish and we could see the tide lifting all ships higher
**Trading Tips**
-A bearish pinbar has formed on the daily so we may see price drop lower in the near term
-I expect the overall bullish picture to stay intact, and so any push lower may be met with strong buying
-If price does drop lower to retest the upper channel of the falling wedge, using this price action information (bullish trend, bullish pattern breakout), it may create a high probably buying opportunity
**Trading Ideas**
-This ETF could be purchased outright right now for a decent risk/reward setup
-If you are willing to wait and see if price falls it may offer a better entry point, at the risk of missing the trade if it doesn't fall
-The price target is the peak of the pattern @ $30 so different ways to get long this trade are to buy the stock outright, create a synthetic long position buy selling a put and buying a call at the same strike(about 1:5 leverage), or selling a vertical put spread for a defined risk trade
Bank of America Short signalTriangle has been completed for BAC since the beginning of the year. Price broke MA 200 which has represented a prominent support so far. MA 50 and MA 200 are close to each other. MA 20 broken with volatility stop on negative configuration. Due to the restricted volatility accrued since the beginning of the year strong price movement will be expected!
C (NYSE) Citigroup long set up M$C Good set up on the monthly chart. A break out could give a very nice r/r here $SPY
JPM - J.P. Morgan ChaseBanks have sold off here and I believe if the market can start to move again, financials will recover. I structured a Super bull for this trade.
Trade: In chart.
Overall, $.46 credit on the trade.
Current risk: $454
Current R/R: 10.2% ROC (likely to increase if I can capture profits in the call spread.
Financial TroubleAre financials rolling over? The financial sector ETF XLF, and regional bank ETF KRE are moving back down to their 12 month lows. The cause is likely lower interest rate hike expectations and government yields. Caution ahead for September's weak season.
A Bad Year For US Financials Looking Even WorseMorgan Stanley, Bank Of America, Citigroup and JPMorgan - all exhibiting similar year to date behaviour. The whole sector is rolling over, reversing the 2017 rallies as the yield curve remains flat, and possibly set to invert. JPMorgan and Bank Of American look particularly bad.. notice both are just managing to hold up above a clear 6 month support. I would bet on break lower in the coming weeks, possibly days. BAC, JPM, C, MS, XLF.
CHKE Very Strongly Oversold CHKE a marketer and manager of fasion portfolios of fashion brands, its brands are licensed with retail and wholesalers in 50 countries and about 9000 retails. After reaching a high of $29.75 in the summer of 2015 it has dropped to a low of $.65. Looking at the company financials reveals possible under evaluation by the market. With a market cap of about$13mil and an enterprise value (MRQ) of $56mil, total assets of $103.597mil and a new deal with Bearpaw Holding CHKE could be on its way back up. In the last 3 weeks we have seen CHKE spike to $1.30 and retreat. A break through of $1.30 could create a large move to the upside and we saw an all time high on volume two days ago. Watch this for a strong move to the upside, possible short squeeze.
Watch out: Cup & Handle forming and Q1 Results!Tesla is still trading within the profit area I identified on March 19th, 2018. It's currently trading BELOW the 200 days EMA as well consolidating the bear tendence.
On the other hand there has been an adding up of long positions lately, probably in the hope of a bounce right after the Q1 earning report scheduled for May the 2nd.
The movement on the hourly chart shows a probable cup & handle formation taking place. It might be a burst but it is worth taking a close look at it.
If, and I highlight the IF, this formation completes I would set a TP at around 305$ more or less. Still within the profit area I highlighted on March 19th.
It is important to notice that on May the 2nd the company scheduled the Q1 financial reporting and Q&A webcast. I personally do not expect a lot from this. And all I expect is no good news.
The company missed production targets for the Model 3 and we already know that. The company closed down the production lines recently due to various issues and all I expect is a confirmation of all these problems (and much more) in the financial results too.
***As usual, not a trading advice, merely my idea for educational purposes only***
JPM | 115-120 May 18th bull call spread $100 debitDown on great earnings
Financials expected out performance
Bullish setup for TDShares of TD appear to be pulling back to test a breakout level at ~$53.50, which coincides with a rising channel bottom. I'm a buyer at that level and will be targeting ~$66 on the upside, or +23% from here. In a rising rate environment and given the technical setup, I expect shares to outperform over the next several months.
Morgan Stanley SHORTShort from $58.02 will continue to short up to $66.
Market Cap - $102.8B
VWAP - 56.77
P/B - 1.49
Debt/Capital - 71.05%
Beta - 1.49
P/E - 18.13
- A major chunk of Morgan Stanley's revenues come from trading activities, which obviously is dependent on what the market is doing. The capital markets have performed very well in the past which lead to decent trading revenues - though since 1Q17 this trend has reversed (which is odd considering what the markets have done since then?!) They have had a slowdown in client activity and the low volatility led to a 1% decline in equity trading and a 4% in fixed income in 2017. This is expected continue in the near term.
- MS 12-month ROE undermines its growth potential. The company's ROE is 10.07% which has gradually improved since the crisis is much lower than the S&P 500's ROE of 16.08%. Showing its not using its shareholder's funds effectively.
- They continue attempting to strengthen their corporate banking section of the company. It was seeing a rise in net interest income over the past couple of years. Though again, since 1Q17 net interest income started to fall. In 2017 the net income interest fell 11% YoY - mainly due to interest expenses up 72%.
NeroTree Capital rates Morgan Stanley as a SELL with a price target of $40 over the next 52w.
I'll take a shot at DB down here... European banks (DB, BCS, LYG) are getting crushed lately... here's where I'll take a shot at a long play on DB, but on tight leash!
Double Top Forming on XLF / FinancialsXLF is approaching massive resistance at $30, the peak prior to the Great Recession. It appears to be forming a double top, which if cleared will open the door for a huge rally. Conversely, a failure would open the door to a large correction. Very short term (next week or so), I think we see buyers lift prices (I'm long 3/29 $29's), but I believe we ultimately fail at $30, a level I'll short against. Given broader weakness, European banking issues (DB is crashing), overly bullish sentiment, and the aforementioned technical picture, it seems to be a good setup.
