Option Investor
Newsletter

Daily Newsletter, Wednesday, 5/20/2015

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Another New All-Time High

by Keene Little

Click here to email Keene Little
Repeated headlines of a "New All-Time High" for the S&P 500 index or Dow Industrials, which missed by only a point today, is good for pulling in more investors but the market is struggling to get these new highs and we're seeing some worrisome deterioration in the market's internals.

Wednesday's Market Stats

Between the Dow Industrials and S&P 500 we're getting new all-time highs this week and that's great for the headlines. If you're not watching the market as carefully as we are those headlines keep you thinking that everything is great with the economy (even if you personally don't feel that way). It is in this way that the Fed and government have been attempting to use the stock market to foster a "wealth effect" but it's apparent that it's starting to backfire as more and more consumers now understand how disconnected Wall Street is from Main Street. Instead of feeling the wealth effect they're now feeling poorer because they haven't participated in the "new highs." How much longer this can continue is anyone's guess but my guess is that there won't be a happy ending for the stock market.

There were no economic reports of significance this morning and the market was listless for most of the day. There was a sell program at the open but the selling was over by 10:00 and that was followed by some buy programs that lifted the indexes right back up to where they were at the open. The message was clear -- no bears allowed here and once the indexes were back to the flat line by 10:30 there was very little action that followed until the FOMC minutes were released at 14:00. Following the FOMC minutes there were some buy programs that finished by 14:30 (it seems these buy and sell programs have an expiration time of 30 minutes) and then sell programs kicked in and dropped the indexes back to the flat line (marginally red for the blue chips) and into the close. Day traders got a little activity today but for everyone else it was just a consolidation (doji) day.

The FOMC minutes highlighted the fact that most of the Fed heads believe the first-quarter slowdown was just an anomaly and that things would improve from there. "Transitory" is their favorite word for data they don't like and believe it will be reversed in the next quarter. While the economic slowing in Q1 keeps the Fed's finger off the button to raise rates at this time, they believe an improving economy will give them the leeway they need to start raising rates. What the market first liked is the fact that the Fed is unlikely to raise rates in June. We already knew that but for some reason the market reacted as though it was startlingly good news. And then by 14:30 the reaction seemed to recognize that in fact we learned nothing new from the minutes.

I continue to believe the Fed will not be "blessed" with good economic news this year to help them in their desire to start raising rates. Keep in mind that the Fed and most mainstream economists have a batting average of zero when it comes to economic forecasting. The number of correct predictions is zero, nada, zip, none. They are so wrong that you can reliably take the other side of their trade and win 100% of the time. Before rates are raised I believe they'll be forced to launch QE5, 6, 7, ... since they have no other tools left to use when the market again becomes unglued and banks start failing. They've tried just about everything and it's all been a miserable failure for the economy when you consider how much debt has been incurred to help the banks, I mean economy. And of course all the debt is exactly the problem -- the economy will remain sluggish as long as there's a debt overhang to deal with. We still haven't worked off the huge credit expansion of the previous decades.

Wall Street has benefitted mightily from the Fed's policies and money creation but the water landing on the backs of Wall Streeters hasn't rolled off onto the poorer people who also thirst for that water. Companies are buying back stock instead of investing in capital improvements to build their businesses, which would then create more jobs, etc. The failure to improve the situation for the 99% has only created more divisiveness in our country (helped by Obama's "us vs. them" mentality) and the spread between the rich and poor is now greater than even the 1920s leading up to the 1929 stock market crash and Great Depression that followed. That comparison is used for a reason.

Yesterday's marginal new high for SPX (1 point) was followed today by another marginal new high (another 1 point) and the choppy climb looks like an ending pattern to the upside. These can go on and on but the danger is that when the rally finishes it's usually followed by a decline that retraces the rally in far less time than it took to build it. In this case the rally from last December (a little more than 5 months), which tacked on 160 points, will probably be retraced in a matter of weeks instead of months. That's the risk for anyone still trying to buy recent highs -- unless they use good stop management I suspect there could soon be real pain felt by many traders/investors who have been buying the "improving economy" assurances.

SPX remains a good proxy index for the broader market, practically mirroring the much larger index, the Wilshire 5000. So I'll start off with the SPX charts to show how it has been slowly chopping its way higher, really since December and especially since the March 11th low. This is typically how rallies finish -- a choppy pattern to the upside is indicative of waning momentum from the buyers while the selling starts to get a little stronger and eventually takes over. These choppy ending patterns tend to be followed by a strong breakdown as all the late-to-the-party bulls are suddenly forced out of their positions while the bears become more aggressive.

The SPX weekly chart below shows weakening rally with the smaller weekly candles since the March low. The waning momentum can be seen on the MACD and RSI, which has clearly been just a warning but not a trade signal. But now the waning momentum combined with the smaller candles adds another reason to stay very cautious about the upside and start thinking how you'd like to play the downside. It's important to recognize how important this top could be since it fits very well (from an EW perspective) as the conclusion to the rally from 2009 and that calls for the start of the next cyclical bear market to finish the secular bear.

S&P 500, SPX, Weekly chart

The choppy rally off the March low is bound by the two bold blue lines on the daily chart below and this afternoon's high tagged the top trend line. We could see a breakout to the upside but at the moment I'm not seeing enough internal strength to suggest that's the higher-odds scenario. Instead, it's possible this afternoon's high put the final touch on the rally and from here we'll see the start of the next big decline.

S&P 500, SPX, Daily chart

Key Levels for SPX:
- bullish above 2136
- bearish below 2085

The 60-min chart below shows the projection at 2135.33 for two equal legs up from May 6th, which I'm calling an a-b-c to complete the 5th wave of the move up from March, which completes the final leg of the rally from March 2009. It is for this reason that I believe looking for a shorting opportunity here could pay off handsomely down the road. But all big moves start off small and right now I'm attempting to identify the first signs of a reversal and today's high at 2134.72 might have been close enough for government work as relates to the 2135.33 target price. There could be another attempt to make a new high (and nab more stops above the trend line) but it's not something I'd be willing to bet on here. However, if the buyers keep this going and SPX closes above 2136, and hold above it, I see the potential for a rally up to 2150 and then up to 2170 if 2150 gives way.

S&P 500, SPX, 60-min chart

While the broader market indexes have been pushing to new highs (except for the laggard techs and small caps at the moment), we continue to see a deterioration in the market's condition. Looking at the car sitting in the lot, all nice and shiny, hides what's under the hood. The Fed and government policies/intervention have made the market nice and shiny but a look under the hood shows worn mechanical parts, leaking seals and frayed wiring. The group of charts below shows the SPX new highs but then below that chart you can see the decline in the 10-dma of the number of new 52-week highs, which is dropping even faster since March, and the steady decline in the 10-dma of the advance-decline line since last October. But don't worry and just pay attention to the top chart -- she's a beaut. Just remember that once you drive it off the lot it's yours and you might not find another sucker, I mean buyer, to pay you equal value should you decide to sell.

SPX vs. 52-week new highs and Advance-Decline line, Daily chart

The DOW has been pushing up against an internal broken uptrend line from October 2014 - February 2015 (gray line on the daily chart below) and still has a little more upside potential to 18397 where the rally off the May 6th low would have two equal legs up (equivalent to the 2135 projection for SPX). The DOW's high so far is yesterday's at 18351. There's higher bullish potential, such as to the top of its rising wedge that has contained the choppy price action since last December (bold blue lines), near 18550. And if the buyers keep going from there I'd look for a rally up to the trend line along the highs from December 2013 - December 2014, near 18800 by early June. The risk is that the choppy move higher could end at any time and with rising wedges on multiple timeframes I think the decline, when it comes, will be very fast. It's been consolidating this week on top of the March 2nd high at 18288 (it closed at 18285 today) so a firm break below that level would be a bearish sign. A stronger signal of a top in place would be a drop below its May 8th high at 18205, which was a test of its March 23rd high at 18206. If you trade the long side I'd keep one foot holding the exit door open so you can be one of the first ones out the door (with an acceptable exit price).

Dow Industrials, INDU, Daily chart

Key Levels for DOW:
- bullish above 18,400
- bearish below 17,925

Typically at significant market tops we find the techs and small caps making final highs later than the blue chips as the last of the animal spirits in the bulls plays out in the riskier stocks. But since the May 6th lows we're seeing a reluctance to buy the higher-beta names and it's possible this is an early sign of risk-off behavior. At the moment NDX has a lower high below its April 27th high and it might finish that way with a truncated completion to its rally. This is not uncommon in a rising wedge pattern, which it's been in since its February 2nd low, but if it does manage to rally up to the top of the wedge we could see 4600 before the rally completes.

Nasdaq-100, NDX, Daily chart

Key Levels for NDX:
- bullish above 4600
- bearish below 4380

The RUT is in the same position as NDX by not making a new high above its April 27th high but in this case I have not been expecting a new high. The RUT's pattern has had me thinking it put in a top at the April 27th high since the decline into the May 6th looks impulsive, which suggests a trend change to the downside. The bounce off the May 6th low is a 3-wave (a-b-c) bounce correction and has so far retraced a little less than 78.6% of its decline, which is a high correction but that kind of retracement has been very common in the past couple of years. There's no confirming evidence yet that the bounce has completed and it too could continue higher into early June and make it up to the 1290-1300 area but at the moment I think the higher-odds scenario is for a turn back down and if it's to be a 3rd wave decline we should see a very strong move lower (one where the 200-dma near 1187 will be a mere speed bump on its way down to the January-February lows near 1150).

Russell-2000, RUT, Daily chart

Key Levels for RUT:
- bullish above 1250
- bearish below 1218

The banks have been relatively strong since January as the broader indexes traded mostly sideways. And now BKX is pressing up against the top of its expanding triangle (the trend line along the highs from March-December 2014) and it continues to push up against its broken uptrend line from March 2009 - October 2011, which so far is just a back-test. But there are hints of bullishness, such as the breaks of the downtrend lines on MACD and RSI, shown on the weekly chart below, so the upside potential needs to be respected here. If BKX can sustain a rally above 78 and pull back no lower than about 75 in the coming weeks I'll turn more bullish the banks and in turn the broader market. But at the moment, with ending patterns galore in other indexes and BKX up against strong resistance, I don't believe this is a good time to be betting on the long side. If the bearish expanding triangle is the correct pattern then we should soon see a strong move back down to the bottom of it, currently near 63.30, before attempting another bounce. This bearish pattern also fits well as the top of the 2009-2015 correction to its 2007-2009 decline (the "bounce" is between a 50% and 62% retracement of its decline).

KBW Bank index, BKX, Weekly chart

The home builders continue to look more bearish than bullish to me. Yesterday's morning spike up on better-than-expected housing starts and permits was quickly reversed after the home construction index (DJUSHB) tagged its broken 50-dma. From an EW perspective, the April-May decline looks impulsive to the downside and the bounce off the May 6th low is so far a 3-wave correction to the decline, retracing 50% with yesterday morning's spike up. It could turn into something more bullish if the April-May decline was the completion of a larger a-b-c pullback from the February 25th high, but at the moment the bearish interpretation of the pattern calls for a strong decline (3rd wave) as the next move.

DJ U.S. Home Construction index, DJUSHB, Daily chart

Is the Dow Theory dead? This is a question many are now asking since the TRAN and INDU are supposed to support one another. When they diverge it's always been a good reason to remain suspicious of the broader market's current trend. But because the TRAN has been divergent since last November's high it has many now saying that it's different this time. Very dangerous words to use for the market. It could be different this time but from a fundamental perspective I think it makes sense to see the Trannies in decline. The economy has been slowing and anyone who thinks otherwise is simply not paying attention to the warning signs. Demand for commodities has been in decline and transportation of commodities has been slowing (the Baltic Dry Index remains near its lows seen in 2008 and 2012).

We know the broader indexes have had a helping hand for a long time and with the plethora of ETFs it's easy to simply buy "the market" without picking individual stocks and that's been keeping the broader indexes rising. But we've also seen deterioration in the participation of stocks in this year's highs, as indicated with the chart of 52-week highs and the advance-decline, shown following the SPX charts above. Fewer stocks are above their 50-day moving averages than there were at February's highs. Fewer are above their 200-day MAs than there were at April's highs. To say the TRAN's bearish divergence should be ignored because it's different his time is pure hogwash. It's not different this time and those who believe it is will be the ones saying "no one could have predicted this decline" when the INDU follows the TRAN lower.

Today's decline in the TRAN, while the DOW was attempting to make another new high, is significant divergence at this time. The TRAN dropped below price-level support near 8580 and closed below it today. Not a good sign for the bulls. But, I can also see a way to look at this as a bullish setup -- I drew a trend line across the lows from December, showing the potential for an end to a choppy decline from March and an end to the large sideways/down consolidation off its November high. It's even showing bullish divergence since its April 6th low. Therefore I think the bears need to see the TRAN below its uptrend line from March 2009 - November 2012, near 8420 (about another 80 points lower) before this can be declared bearish. If the bullish consolidation pattern is correct then we're about to see a strong rally follow. I'm not quite ready to go there but bears need to see the potential.

Transportation Index, TRAN, Daily chart

Last week I had pointed out on the U.S. Dollar's weekly chart that it had pulled back to the top of a shallow parallel up-channel from 2008, near 93.50, and that it should act as support if the dollar is only going to consolidate before heading higher. Last Thursday and Friday it dropped marginally below 93.50 and it was looking like it might break down further but this week it has bounced strongly and support is holding. Until I see evidence to the contrary, I'm looking for a multi-month sideways consolidation between 93.50 and 100 before the dollar resumes its rally.

U.S. Dollar contract, DX, Weekly chart

When gold rallied strongly last week I thought it had a pretty good chance of rallying up to a 1251 projection for two equal legs up from March 17th but yesterday's strong decline now puts that upside projection in jeopardy. If we do get one more leg up I'm wondering if it will be able to reach 1244 for a 62% retracement of its January-March decline. It might pull back a little further and then give us one more rally to complete a rising wedge pattern off its March 17th low but at this point it's not clear what gold will likely do next. Once the bounce completes, and it might already be with Monday's high at 1232, we should see a resumption of selling in gold.

Gold continuous contract, GC, Daily chart

When I'm not sure what gold's next move is likely to be I check silver for some clues. Its bounce off the March 11th low did achieve two equal legs up by tagging 17.70 on Monday. That could be it for the bounce correction and now we'll see silver head lower from here. It's hard to see on the squished weekly chart below, but Monday's high at 17.77 also tagged its 50-week MA at 17.64. The sharp decline Tuesday morning followed by today's choppy bounce has it looking like it's going to head lower from here and if it drops below support near 15.25 it will likely be followed by a decline toward 12 where it could set up a longer-term buying opportunity (it would be the first time in a long time to evaluate that potential).

Silver continuous contract, SI, Weekly chart

Last week's chart of oil was a daily chart to show the rising wedge pattern for the leg up from March 18th and how it broke down from the wedge and then back-tested it last Wednesday. The decline since that back-test left a bearish kiss goodbye and the bearish potential is for oil to start back down. The 3-wave bounce off the January low could be the completion of the 4th wave correction in the move down from August 2013 (it even shows alternation with the relatively flat bounce correction from November 2013 to June 2014). If we do get a 5th wave down from here I think it will be basically a retest of the March low near 42 but would become more bearish below 40. The other possibility is that we'll see oil chop sideways for most of this year before heading back down. At this point oil would turn more bullish above last week's high at 62.58.

Oil continuous contract, CL, Weekly chart

Tomorrow's economic reports include unemployment data, existing home sales, Philly Fed and Leading Indicators, none of which will likely move the market much. The Philly Fed at 10:00 could cause a little reaction if it comes in much different than expectations for a slight improvement over April.

Economic reports and Summary

Conclusion

Last week through this week has been a target window for a top in the market and there's a good possibility this afternoon's highs completed the rally. For weeks I've been looking for a new high for SPX and specifically up to 2135, which was missed by less than a point today. It has a nice ending pattern but we don't have any evidence yet that a reversal is here. SPX back below price-level support near 2120 with an impulsive (sharp 5-wave) decline would strongly suggest a top of importance is in place but until then there remains additional upside potential. For SPX that would be up to 2150-2170 by early June.

The current risk, as I see it, is that upside potential is dwarfed by downside risk. The move higher has been very choppy on waning momentum and declining participation, which is a classic topping signal. It's also typically followed by a strong decline once it breaks. I would expect to see several mornings start with large gaps to the downside, forcing traders on both sides to chase the move lower (something the HFT players love to trade).

There's definitely upside potential and that's why bears need to be very disciplined in their approach to the short side. We all know the market has a helping hand and trying to short the market has generally been an exercise in frustration. But this has also created a sense of complacency among the bulls and when they wake up and smell the coffee with a DOW decline of -500 points it will catch their attention and panic will follow. Selling typically creates a much stronger move than a rally and it's one reason why it can be fun to catch a ride on the southbound bus. Catching that ride can be a challenge but done properly it can easily make up for several small stop-outs.

Good luck and I'll be back with you next Wednesday.

Keene H. Little, CMT

In the end everything works out and if it doesn't work out, it is not the end. Old Indian Saying


New Plays

Buying Opportunity

by James Brown

Click here to email James Brown


NEW BULLISH Plays

Hanesbrands Inc. - HBI - close: 32.21 change: +0.15

Stop Loss: 29.95
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on May -- at $---.--
Listed on May 20, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 2.74 million
New Positions: Yes, see below

Company Description

Why We Like It:
HBI was founded back in 1901. Today you will find Hanes products in more than 80 percent of U.S. homes.

HBI is in the consumer goods sector. According to the company, "HanesBrands, an S&P 500 company, is a socially responsible leading marketer of everyday basic apparel in the Americas, Europe and Asia under some of the world’s strongest apparel brands, including Hanes, Champion, Playtex, DIM, Bali, Maidenform, Flexees, JMS/Just My Size, Wonderbra, Nur Die/Nur Der, Lovable and Gear for Sports.

We sell bras, panties, shapewear, sheer hosiery, men's underwear, children's underwear, socks, T-shirts and other activewear in the United States, Canada, Mexico and other leading markets in the Americas, Asia and Europe. In the United States, we sell more units of intimate apparel, male underwear, socks, shapewear, hosiery and T-shirts than any other company."

What makes HBI different than most of its competitors is that HBI owns and operates its own manufacturing facilities. About 90% of their apparel comes from company-run plants. That helps them control costs throughout the production process.

This year the company has been very shareholder friendly. Back in January they raised their dividend 33% and announced a 4-for-1 split. The stock split took place in March this year.

HBI's most recent earnings report was April 23rd. HBI reported their Q1 earnings were up +16% from a year ago to $0.22 a share. That missed estimates of $0.23. Revenues were up +14% to $1.21 billion. This was just below expectations of $1.22 billion.

In the company press release HBI Chairman and CEO Richard Noll commented on their results, saying, "We are off to a great start in 2015, once again delivering a double-digit increase in EPS, while tracking to our full-year growth plans. Our acquisition strategy continues to create value with DBApparel, Maidenform and Gear for Sports all contributing substantially to our double-digit growth. In addition, we are raising our 2015 performance outlook to reflect the recent acquisition of Knights Apparel."

Management raised their earnings guidance for 2015 from $1.58-1.63 to $1.61-1.66 per share. Wall Street estimates were at $1.64. HBI also raised their 2015 revenue guidance from $5.78-5.83 billion to $5.90-5.95 billion. Consensus estimates were already at $5.95 billion.

The stock was hammered on the earning miss as investors ignored the improved earnings and revenue guidance. The stock corrected from about $34.60 to under $31.00 in four days (-10 correction).

Analysts' reaction to HBI's results have been positive. Some have noted that Q1 is normally a slower season for HBI. They see the pullback in HBI's stock as a buying opportunity. Multiple firms have raised their price target since the earnings report (new targets are $37, $38, and $40 per share).

Technically HBI has been consolidating sideways in the $30.50-32.00 zone the last several days and have just recently started to breakout from this trading range. We want to hop on board if this bounce continues. Tonight we're suggesting a trigger to open bullish positions at $32.35.

Trigger @ $32.35

- Suggested Positions -

Buy HBI stock @ $32.35

- (or for more adventurous traders, try this option) -

Buy the JUL $32.50 CALL (HBI150717C32.50) current ask $1.00
option price is a current quote and not a suggested entry price.

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike

Daily Chart:

Weekly Chart:



In Play Updates and Reviews

Impact Of FOMC Minutes Fades

by James Brown

Click here to email James Brown

Editor's Note:
Stocks spent the day drifting sideways until spiking higher on the FOMC minutes. Unfortunately, this afternoon rally on the Fed minutes faded quickly. Meanwhile transports accelerated lower thanks to a terrible performance in the airline stocks.

ASPS hit our stop loss today.

We want to exit our SNCR trade tomorrow morning.


Current Portfolio:


BULLISH Play Updates

Allegheny Technologies - ATI - close: 35.73 change: +0.03

Stop Loss: 34.75
Target(s): To Be Determined
Current Gain/Loss: -0.9%
Entry on May 11 at $36.05
Listed on May 05, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 1.0 million
New Positions: see below

Comments:
05/20/15: ATI dipped toward round-number support at $35.00 and bounced. Shares actually hit $34.98 before rebounding. Hopefully the sell-off might be over. ATI has fallen -6.5% in the last four days (last Thursday's close to today's intraday low).

I am not suggesting new positions at this time.

Trade Description: May 5, 2015:
It looks like shares of ATI have put in a bottom.

The company is in the industrial goods sector. According to ATI, "Allegheny Technologies Incorporated is one of the largest and most diversified specialty materials and components producers in the world with revenues of approximately $4.4 billion for the last twelve months. ATI has approximately 9,600 full-time employees world-wide who use innovative technologies to offer global markets a wide range of specialty materials solutions. Our major markets are aerospace and defense, oil and gas/chemical process industry, electrical energy, medical, automotive, food equipment and appliance, and construction and mining."

ATI's most recent earnings report was April 21st. Management said their Q1 2015 earnings were $0.09 a share. Depending on who you polled ATI's nine cent profit was either one cent above or one cent below analysts' estimates. Whatever the case their $0.09 profit was a big improvement from the $0.19 loss a year ago. Revenues for Q1 2015 were up +14% from a year ago to $1.13 billion, which was above analysts' estimates.

ATI saw a big improvement from their Q4 with sales up +7% sequentially. This helped drive a +25% improvement in operating profits.

ATI President and CEO Rich Harshman commented on their results, "Aerospace market sales increased 14% in the first quarter 2015 compared to the fourth quarter 2014. We saw double-digit demand growth from both jet engine and airframe customers of 14% and 22%, respectively. First quarter aerospace demand was led by organic growth of our mill products. Sales of our nickel-based alloys and specialty alloys increased 15% and sales of our titanium alloys grew 16% with a good mix of value-added mill products. We expect sales growth of our precision forgings, castings, and components to begin later this year supported by the build ramp of next-generation jet engines."

Looking ahead ATI expects demand from the oil and gas market to remain soft. However, demand from the airframe and jet engine makers should be strong throughout 2015.

The stock broke out from a consolidation pattern on its better than expected Q1 earnings. This helped generate a buy signal on the point & figure chart, which is currently forecasting at $47.00 target. Shares of ATI spent a few days struggling with technical resistance at its 200-dma but they have broken out past this level as well. The past seven months looks like a massive bottoming process for the stock. Now shares are on the verge of breaking out past key resistance in the $35-36 area. We want to use a trigger at $36.05 to launch bullish positions.

FYI: ATI's next dividend ($0.18) is this month. The ex-dividend date is May 22nd. The shareholder record date is May 27th.

- Suggested Positions -

Long ATI stock @ $36.05

- (or for more adventurous traders, try this option) -

Long JUL $37.50 CALL (ATI150717C37.50) entry $1.25

05/14/15 new stop @ 34.75
05/11/15 triggered $ 36.05
Option Format: symbol-year-month-day-call-strike


GoPro, Inc. - GPRO - close: 53.88 change: +2.03

Stop Loss: 49.25
Target(s): To Be Determined
Current Gain/Loss: +6.2%
Entry on May 14 at $50.75
Listed on May 13, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 6.5 million
New Positions: see below

Comments:
05/20/15: GPRO ignored the market's lackluster performance and continued to push higher on its own. Shares outperformed the market with a +3.9% gain and a new three-month high. The simple 20-dma has risen to $49.37. We'll move our stop loss up to $49.25.

Trade Description: May 13, 2015:
GPRO looks like a short squeeze waiting to happen. This company is the premier brand for wearable "action" cameras.

Here's the company's rather self-confident description, "GoPro, Inc. is transforming the way consumers capture, manage, share and enjoy meaningful life experiences. We do this by enabling people to self-capture engaging, immersive photo and video content of themselves participating in their favorite activities. Our customers include some of the world's most active and passionate people. The quality and volume of their shared GoPro content, coupled with their enthusiasm for our brand, virally drives awareness and demand for our products.

What began as an idea to help athletes document themselves engaged in their sport has become a widely adopted solution for people to document themselves engaged in their interests, whatever they may be. From extreme to mainstream, professional to consumer, GoPro has enabled the world to capture and share its passions. And in doing so the world, in turn, is helping GoPro become one of the most exciting and aspirational companies of our time."

GPRO came to market with its IPO in June 2014. The stock opened for trading at $28.65 and by October 2014 shares were nearing $100 per share. That proved to be the peak. GPRO spent the next six months correcting lower and finally bottomed near $37 in March this year. Now the stock is building on a steady trend of higher lows as investors digest the company's massive growth.

GPRO reported their 2015 Q1 results on April 28th. Wall Street was expecting a profit of $0.18 per share on revenues of $341.7 million. GPRO beat estimates with a profit of $0.24 a share. Revenues were up +54% from a year ago to $363 million.

Management said it was their second highest revenue quarter in history. Their GAAP results saw gross margins improve from 40.9% in Q1 2014 to 45.1% today. Their net income attributable to common stockholders increased 98.2% compared to the first quarter of 2014. International sales surged +66% and accounted for just over half of total sales in Q1 2015. GPRO shipped 1.3 million devices in the first quarter. This was the third quarter in a row of more than one million units.

GPRO management raised their guidance. They now expect 2015 Q2 revenues in the $380-400 million range with earnings in the $0.24-0.26 region. Analysts were only forecasting $335 million with earnings at $0.16 a share.

The better than expected Q1 results and the upgraded Q2 guidance sparked several upgrades. Multiple analysts raised their price target on GPRO. New targets include: $56, $65, $66, $70, and $76.

There are plenty of bears who think GPRO is overpriced with P/E above 47 and rising competition. The biggest argument against GPRO is competition from a Chinese rival Xiaomi who has produced a competitive action camera that they're selling for less than half of GPRO's similar model. GPRO critics are worried this could kill GPRO's growth in China and the rest of Asia. It's too early to tell who will be right but momentum is currently favoring the bulls.

The most recent data listed short interest at 24% of the 55.5 million share float. That's plenty of fuel to send GPRO soaring. Right now the stock is hovering around the psychological resistance level at $50.00. We are suggesting a trigger to launch bullish positions at $50.75.

- Suggested Positions -

Long GPRO stock @ $50.75

- (or for more adventurous traders, try this option) -

Long JUL $55 CALL (GPRO150717C55) entry $2.00

05/20/15 new stop @ 49.25
05/14/15 triggered @ $50.75
Option Format: symbol-year-month-day-call-strike


Mobileye N.V. - MBLY - close: 46.10 change: -1.48

Stop Loss: 44.95
Target(s): To Be Determined
Current Gain/Loss: -5.2%
Entry on May 15 at $48.65
Listed on May 14, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 3.2 million
New Positions: see below

Comments:
05/20/15: I don't see any specific news behind the relative weakness in MBLY today. Shares underperformed with a -3.1% loss. This is the third decline in a row. I am not suggesting new positions at this time.

Trade Description: May 14, 2015:
The future of hands free driving is a lot closer tha you might think. MBLY is leading the charge. Its technology is already in more than three million cars made by companies like BMW, General Motors, and Tesla.

What exactly does this technology due? DAS stands for driver assistance systems. Sometimes you might see it called ADAS for advanced driver assistance systems. This new technology helps drivers avoid collisions with other vehicles, pedestrians, bicyclists, and more while also alerting the driver to road signs and traffic lights.

The company website describes Mobileye as "a technological leader in the area of software algorithms, system-on-chips and customer applications that are based on processing visual information for the market of driver assistance systems (DAS). Mobileye's technology keeps passengers safer on the roads, reduces the risks of traffic accidents, saves lives and has the potential to revolutionize the driving experience by enabling autonomous driving."

MBLY said their technology will be available in 160 car models from 18 car manufacturers (OEMs). Further, Mobileye's technology has been selected for implementation in serial production of 237 car models from 20 OEMs by 2016.

The company is already developing a system for autonomous driving or hands free driving. They currently plan to launch an autonomous system in 2016 that will work at highway speeds and in congested traffic situations.

MBLY stock came to market in August 2014. Demand was strong enough that they upped the number of shares available from around 27 million to 35.6 million shares. They raised the IPO price from the $22 range to $25. This valued MBLY at $5.3 billion. The first day of trading saw MBLY opened at $36.00. Two months later MBLY traded at $60.00.

The IPO excitement has faded but MBLY's valuation has grown. There are now 216.6 million shares outstanding and the company's market cap is now more than $10 billion.

It's easy to see why investors are optimistic on MBLY. Annual revenues have soared from $19.2 million in 2011 to $143.6 million in 2014. Their revenues last year rose +77% from 2013. Currently a poll of analysts by Thomson Reuters is forecasting sales to rise +50% in 2015 to $218.3 million. Earnings are forecasted to surge +95%.

MBLY's most recent earnings report was May 11th. They reported their Q1 results of $0.08 per share, which was a penny above estimates. Revenues were up +28% to $45.6 million, also above estimates.

Last year the New York Post recently ran an article discussing how the White House might generate a bullish tailwind for MBLY. The National Highway Traffic Safety Administration issued a research report that estimated ADAS type of technology could eliminate almost 600,000 left-turn and intersection crashes a year. They report also suggested that adding FCAM and lane departure technology on big vehicles like over the road trucks could reduce accidents with these huge vehicles by up to 25%. Following this report the White House said they would draft new rules that required this sort of tech in new vehicles.

Most of Wall Street analysts seem bullish. Industry experts forecast the camera-based ADAS market to grow +37% CAGR from 2014 to 2020. Goldman Sachs Recently upgraded the stock to a buy. They believe MBLY will see a 34% CAGR in sales through 2020 and will have 65% of the market by then. MBLY also garnered positive comments from a Morgan Stanley analyst who raised their price target to $68. They believe the street's 2015 estimates for MBLY are too low after the company delivered super strong growth in the last couple of quarters.

Technically shares of MBLY look attractive with a bullish trend of higher lows. The point & figure chart is bullish and forecasting at $69.00 target. Currently MBLY is hovering just below its late April highs in the $48.00-48.50 zone. We want to launch positions on a breakout past this region. Tonight we're suggesting a trigger at $48.65.

- Suggested Positions -

Long MBLY stock @ $48.65

- (or for more adventurous traders, try this option) -

Long JUL $50 CALL (MBLY150717C50) entry $2.10

05/15/15 triggered @ $48.65
Option Format: symbol-year-month-day-call-strike


Starbucks Corp. - SBUX - close: 51.03 change: -0.39

Stop Loss: 48.40
Target(s): To Be Determined
Current Gain/Loss: +0.0%
Entry on May 18 at $51.05
Listed on May 15, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 5.8 million
New Positions: see below

Comments:
05/20/15: SBUX encountered some profit taking. Shares snapped a four-day winning streak with a dip to $50.43 intraday. SBUX managed to pare its losses by the closing bell. If you're looking for an entry point try waiting for a dip near the $50.00 mark.

Trade Description: May 16, 2015:
The world seems to have an insatiable appetite for coffee. Starbucks is more than happy to help fill that need. The first Starbucks opened in Seattle back in 1971. Today they are a global brand with locations in 66 countries. SBUX operates more than 21,000 retail stores with more than 300,000 workers.

A few years ago Business Insider published some facts on SBUX. The average SBUX customer stops by six times a month. The really loyal, top 20% of customers, come in 16 times a month. There are nearly 90,000 potential drink combinations at your local Starbucks. The company spends more money on healthcare for its employees than it does on coffee beans.

The company's earnings results were only mediocre most of 2014 year. You can see the results in SBUX's long-term chart below. After incredible gains in 2013 SBUX has essentially consolidated sideways in 2014. SBUX broke out of that sideways funk after it reported earnings in January 2015.

Five-Year Plan

In late 2014 SBUX announced their five-year plan to increase profitability. Here's an excerpt from a company press release:

"The seismic shift in consumer behavior underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it," Schultz said (Howard Schultz is the Founder, Chairman, President, and CEO of Starbucks). "Over the next five years, Starbucks will continue to lean into this new era by innovating in transformational ways across coffee, tea and retail, elevating our customer and partner experiences, continuing to extend our leadership position in digital and mobile technologies, and unlocking new markets, channels and formats around the world. Investing in our coffee, our people and the communities we serve will remain at our core as we continue to redefine the role and responsibility of a public company in today's disruptive global consumer, economic and retail environments."

"Starbucks business, operations and growth trajectory around the world have never been stronger, and we are more confident than ever in our ability to continue to drive significant growth and meet our long term financial targets," said Troy Alstead, Starbucks chief operating officer. "We have more customers visiting more stores more frequently, both in the U.S. and around the world, than at any time in our history. And we expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet."

The company believes they can grow revenues from $16 billion in FY2014 to almost $30 billion by FY2019. To do that they will expand deeper into regions like China, Japan, India, and Brazil. SBUX expects to nearly double its stores in China to over 3,000 locations in the next five years

They're also working hard on their mobile ordering technology to speed up the experience so customers don't have to wait in line so long at their busiest locations. This will also include a delivery service.

Part of the five-year plan is a new marketing campaign called Starbucks Evening experience. The company wants to be the "third place" between home and work. After 4:00 p.m. they will start offering alcohol, mainly wine and beer, in addition to new tapas-like smaller plates.

The company recently launched its first ever Starbucks Reserve Roastery and Tasting Room in Seattle, near their iconic first retail store. The new roastery is supposed to be the ultimate coffee lovers experience. CEO Schultz said they will eventually open up about 100 of these Starbucks Reserve locations.

SBUX is having a pretty good 2015 so far with the stock up +23%, outperforming the broader market. A lot of this gain was thanks to a post-earnings pops. SBUX reported its Q1 2015 results on January 22nd. Adjusted earnings, backing out one-time charges, were $0.80 a share. That's in-line with estimates. Revenues were up +13.3% to $4.8 billion, also in-line with estimates.

It was a very strong holiday period for SBUX thanks in part to astonishing gift card sales. The amount of money loaded onto SBUX gift cards during the holidays surged +17% to a record $1.6 billion. One out of every seven Americans received a SBUX gift card. The company also saw significant growth overseas with its China and Asia-Pacific business soaring +85% to sales of $495 million. Their mobile transactions have reached seven million transactions a week. Investors applauded the news in spite of the in-line results and sent SBUX soaring to new all-time highs the next day.

This earnings scenario, where SBUX delivers results in-line with estimates and rallies anyway, just happened again in late April. Of course it's worth noting that even in-line results still represent exceptional growth.

SBUX reported its Q2 (2015) on April 23rd. Earnings of $0.33 a share were in-line with estimates. Revenues were up +17.8% to $4.56 billion, slightly above expectations. It was their strongest growth in four years. Customers are responding well to new drink options and an updated food menu. They're also developing new delivery options, mobile pay options, and alcoholic drinks available at select locations.

Worldwide same-store sales grew +7%. This was significantly above estimates. It also marked the 21st consecutive quarter where SBUX's comparable store sales were +5% or more.

The company issued mixed guidance. The stronger dollar is having an impact. They see fiscal 2015 results in the $1.55-1.57 range. That compares to Wall Street estimates for $1.57 per share. However, the company's revenue estimates are more optimistic. They're forecasting +16-18% sales growth into the $19.1-19.4 billion zone compares to analysts' estimates of $19.1 billion.

SBUX popped to new highs following its results and then spent the next week consolidating lower. Investors started buying the dips again at its bullish trend of higher lows. It looks like the consolidation is over and SBUX is pushing higher. We want to hop on board. Tonight we are suggesting a trigger to open bullish positions at $51.05.

- Suggested Positions -

Long SBUX stock @ $51.05

- (or for more adventurous traders, try this option) -

Long JUL $50 CALL (SBUX150717C50) entry $2.07

05/18/15 triggered @ $51.05
Option Format: symbol-year-month-day-call-strike


Super Micro Computer - SMCI - close: 32.88 change: -0.60

Stop Loss: 31.65
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on May -- at $---.--
Listed on May 18, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 622 thousand
New Positions: Yes, see below

Comments:
05/20/15: SMCI managed to outperform the major indices today. Shares bounced off their early morning low to close up +0.48%. We are still on the sidelines. Our suggested entry point is $33.65.

Trade Description: May 18, 2015:
Sometimes the market's expectations get too high. When a company fails to meet these rising expectations the stock can get punished.

SMCI is in the technology sector. According to the company, "Supermicro® (SMCI), the leading innovator in high-performance, high-efficiency server technology is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and Embedded Systems worldwide. Supermicro is committed to protecting the environment through its 'We Keep IT Green' initiative and provides customers with the most energy-efficient, environmentally-friendly solutions available on the market."

It's easy to see why investors might have big expectations for SMCI. Looking at three of their last four earnings reports SMCI has beaten Wall Street estimates on both the top and bottom line and raised guidance three quarters in a row. It was their most recent report where results seemed to stumble.

SMCI report its fiscal Q3 results on April 21st, after the closing bell. Earnings were up 25% from a year ago to $0.47 a share. Yet analysts were expecting SMCI to report earnings in the $0.49-0.50 range. Revenues were up +26% from a year ago to $471.2 million, but this also missed expectations.

Guidance was also a little soft. Traders were used to SMCI raising their guidance. This time guidance for the current quarter (their Q4) was generally below consensus estimates.

The market overreacted to the disappointment. Shares crashed from $35 to almost $28 following its earnings news. Then traders started buying SMCI in the $29-30 region a couple of weeks ago. The rebound has lifted SMCI back above technical resistance at its 200-dma and back above price resistance near $32.00. We are betting this rebound continues. Tonight we're suggesting a trigger to open bullish positions at $33.65.

Trigger @ $33.65

- Suggested Positions -

Buy SMCI stock @ $33.65

- (or for more adventurous traders, try this option) -

Buy the JUL $35 CALL (SMCI150717C35)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike


Synchronoss Technologies - SNCR - close: 46.10 change: -0.79

Stop Loss: 43.85
Target(s): To Be Determined
Current Gain/Loss: +0.0%
Entry on May 11 at $46.10
Listed on May 09, 2015
Time Frame: Exit prior to June option expiration
Average Daily Volume = 527 thousand
New Positions: see below

Comments:
05/20/15: Heads up! I am hitting the eject button on this SNCR trade.

The stock looks like it could be rolling over. After failing at the 50-dma for three days in a row we saw SNCR spike above this resistance yesterday and then reverse lower. Today's decline (-1.6%) appears to confirm the reversal.

I am suggesting an immediate exit.

*small positions to limit risk* - Suggested Positions -

Long SNCR stock @ $46.10

- (or for more adventurous traders, try this option) -

Long JUN $50 CALL (SNCR150619C50) entry $0.90

05/20/15 prepare to exit this trade tomorrow morning
05/11/15 triggered @ 46.10
Option Format: symbol-year-month-day-call-strike


Total System Services, Inc. - TSS - close: 41.84 change: -0.08

Stop Loss: 40.75
Target(s): To Be Determined
Current Gain/Loss: +2.0%
Entry on May 08 at $41.02
Listed on May 07, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 843 thousand
New Positions: see below

Comments:
05/20/15: Hmm... today's action in TSS might be a warning signal. Shares opened higher and then reversed. Technically today's move has created a bearish engulfing candlestick reversal pattern but it needs to see confirmation.

No new positions at this time.

Trade Description: May 8, 2015:
Consistently beating Wall Street's earnings estimates has driven shares of TSS to new all-time highs. The company is in the financial sector. The XLF financial ETF is down -1.2% for the year. TSS is up +19% for the year.

According to the company, "At TSYS® (TSS), we believe payments should revolve around people, not the other way around. We call this belief People-Centered Payments®. By putting people at the center of every decision we make, TSYS supports financial institutions, businesses and governments in more than 80 countries. Through NetSpend®, A TSYS Company, we empower consumers with the convenience, security, and freedom to be self-banked. TSYS offers issuer services and merchant payment acceptance for credit, debit, prepaid, healthcare and business solutions. TSYS' headquarters are located in Columbus, Ga., U.S.A., with local offices spread across the Americas, EMEA and Asia-Pacific."

This company has beaten analysts' estimates on both the top and bottom line the last four quarters in a row. Their most recent earnings report was April 28th. Earnings per share soared +41% to $0.54. That was eight cents above estimates. Revenues were up +11.7% to $662.2 million.

A few months ago (January 2015) TSS announced a new 20 million share stock buyback program to replace their old one. Last quarter they repurchased 1.45 million shares. When you include the company's dividend they paid out 73% of their available free cash flow to shareholders.

TSS' President and CEO, Mr. M. Troy Woods, commented on their recent results saying, "As a result of the great start to the year, we are revising our adjusted EPS guidance to grow between 12-14% from the previous range of 11-13%."

Shares of TSS surged to new highs on its earnings report. Since then traders have been buying the dips and the stock set a record closing high today. Tonight we're suggesting a trigger to launch bullish positions at $40.85.

FYI: TSS will hold an analyst day on May 20th.

- Suggested Positions -

Long TSS stock @ $41.02

- (or for more adventurous traders, try this option) -

Long AUG $40 CALL (TSS150821C40) entry $2.50

05/19/15 new stop @ 40.75
05/18/15 new stop @ 39.85
05/08/15 triggered on gap open at $41.02, suggested entry was $40.85
Option Format: symbol-year-month-day-call-strike




BEARISH Play Updates

Emerge Energy Services - EMES - close: 38.70 change: +0.21

Stop Loss: 40.35
Target(s): To Be Determined
Current Gain/Loss: -2.8%
Entry on May 07 at $37.65
Listed on May 06, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 413 thousand
New Positions: see below

Comments:
05/20/15: I am still urging caution on our EMES trade. The stock only gained 21 cents but it ended on an up swing. Shares might challenge technical resistance at its 20-dma and the $40.00 level again.

I am not suggesting new positions at this time.

Trade Description: May 6, 2015:
The bubble in fracking sand and proppant stocks popped in 2014. The top in the fracking sand producers was just a couple of months after crude oil peaked last year. The impact of crude oil's decline and the industry's reaction to the oversupply-pricing issue will still be felt for months to come. Just as the oil and gas producers are cutting expenses, mothballing rigs, and delaying new projects, the proppant companies are forced to do the same. EMES recently announced they were canceling plans to build a new silica sand processing facility.

EMES is in the basic materials sector. They're part of the oil services industry. According to the company, "Emerge Energy Services LP (EMES) is a growth-oriented limited partnership engaged in the businesses of mining, producing, and distributing silica sand, a key input for the hydraulic fracturing of oil and natural gas wells. Emerge Energy also processes transmix, distributes refined motor fuels, operates bulk motor fuel storage terminals, and provides complementary fuel services. Emerge Energy operates its sand segment through its subsidiary Superior Silica Sands LLC and its fuel segment through its subsidiaries Direct Fuels LLC and Allied Energy Company LLC."

The earnings picture has been damaged by a very rough pricing environment for EMES' sand. Their Q4 2014 earnings, announced on March 2nd, were $1.01 per share. That was 12 cents below expectations. Q4 revenues were down -1.4% to $242.6 million compared to analysts' estimates of $301 million. That's a huge revenue miss.

The weakness continued in the first quarter. Wall Street was expecting EMES to report Q1 2015 earnings of $0.83 a share on revenues of $264 million. The company only delivered $0.39 per share with revenues down -25.5% to $204 million. The rest of 2015 is expected to remain challenging.

The stock was hammered again on April 24th when EMES management reduced their dividend from $1.41 per share down to $1.00.

The $40.00 level has been support and now shares are breaking down. The most recent data listed short interest at 13% of the very small 14.6 million share float. This time the shorts are probably right but the high short interest could make this a volatile trade. EMES' recent attempt at a bounce has been failing. We want to catch the next leg lower. Tonight we are suggesting a trigger to launch bearish positions at $37.65.

- Suggested Positions -

Short EMES stock @ $37.65

- (or for more adventurous traders, try this option) -

Long JUN $35 PUT (EMES150619P35) entry $2.35

05/18/15 Goldman upgraded EMES this morning
05/16/15 new stop @ $40.35
05/07/15 triggered @ 37.65
Option Format: symbol-year-month-day-call-strike


First Solar, Inc. - FSLR - close: 54.92 change: -0.36

Stop Loss: 57.25
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on May -- at $---.--
Listed on May 19, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 2.7 million
New Positions: Yes, see below

Comments:
05/20/15: Solar stocks had a rough day after JA Solar (JASO) missed earnings estimates. The stock crashed through support to close down -4.9%. This pressured other solar names. FSLR slipped close to a breakdown with a -0.65% decline.

Our suggested entry point $55.40.

Trade Description: May 19, 2015:
Investors may not have the patience for FSLR's plans to form a yieldco. The last several months have delivered some rocky moves in FSLR's stock with a swing from the low $70s down to $40 and then back to $65. Now shares are breaking down again.

FSLR is in the technology sector. According to the company, "First Solar is a leading global provider of comprehensive photovoltaic (PV) solar systems which use its advanced module and system technology. The Company's integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar's renewable energy systems protect and enhance the environment."

FSLR's most recent earnings report was on April 30th. Their Q1 results were a disaster. A year ago FSLR earned $1.89 per share for Q1 2014. This year analysts were expecting a loss of ($0.28) per share. FSLR delivered a loss of ($0.62). Revenues plunged -50% from a year ago to $469 million. Wall Street had been expecting $600-636 million in revenues.

Back in February, when FSLR reported its Q4 results, the company had already warned that future revenues would be weak (for multiple quarters) as they prepare to form a yieldco with another solar firm, SunPower (SPWR). At the time, the market didn't seem to care. Shares of FSLR soared on its earnings report back in February.

Three months later and investor sentiment appears to have changed. FSLR commented on their revenue declines in their Q1 report. Here's an excerpt from their earnings report, "The sequential decrease in net sales resulted from retaining projects which would otherwise have generated revenue in anticipation of the Company's announced plans to pursue a YieldCo. In addition, delays on multiple projects in the current quarter, a higher mix of module only sales and the sale of the SolarGen 2 project in the prior quarter contributed to the lower revenue."

A yieldco is similar to a real estate investment trust (REIT) which is designed to produce dividends for investors. Back in February FSLR had announced plans to partner with rival SPWR and form a new company, 8Point3 Energy Partners, as a new yieldco company. FSLR believes that long-term the yieldco will deliver for investors but traders may not have the patience to wait around at current valuations.

Technically shares of FSLR look weak. They are down sharply from their late April, pre-earnings, high near $65.00. There has been very little oversold bounce as shares churned sideways in the $55-57 zone these last several days. The point & figure chart is bearish and forecasting at $45.00 target. Odds are good that FSLR could try and fill the gap from February and that would mean a drop toward round-number support near $50.00. Tonight we are suggesting a trigger to open bearish positions at $54.40.

Trigger @ $54.40

- Suggested Positions -

Short FSLR stock @ $54.40

- (or for more adventurous traders, try this option) -

Buy the JUL $50 PUT (FSLR150717P50)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike



CLOSED BULLISH PLAYS

Altisource Portfolio Solutions - ASPS - close: 28.95 chg: -0.58

Stop Loss: 28.45
Target(s): To Be Determined
Current Gain/Loss: -8.5%
Entry on May 11 at $31.10
Listed on May 09, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 777 thousand
New Positions: see below

Comments:
05/20/15: We have been growing more cautious on ASPS over the last few days. Shares underperformed the market today and fell -6.5% intraday before paring its loss to just -1.9%. Our new stop loss was hit at $28.45.

This was a a higher-risk, more aggressive trade.

*small positions to limit risk* - Suggested Positions -

Long ASPS stock @ $31.10 exit $28.45 (-8.5%)

- (or for more adventurous traders, try this option) -

JUN $30 CALL (ASPS150619C30) entry $3.00 exit $1.35 (-55.0%)

05/20/15 stopped out
05/19/15 new stop @ 28.45
05/11/15 triggered @ 31.10
Option Format: symbol-year-month-day-call-strike

chart: