The morning rebound was strong as shorts covered but the gains ended at 1:PM. The majority of stocks posted gains but all those gains were in the morning. The Dow recovered only about 78% of yesterday's loss. If we repeated the last two days several times we would end up about 500 points lower. It was a good rebound but it did not recover Tuesday's loss.
Stop Loss Updates
Check the graphic below for any new stop losses in bright yellow.
We need to always be prepared for an unexpected decline.
Check the graphic below for any profit stops in green.
We need to always be prepared for a profit exit at resistance.
Current Position Changes
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Full updates on all plays on Wednesday and Saturday. Only closed plays are updated on other days.
BULLISH Play Updates
FFIV - F4 Networks - Company Profile
F5 will present at the Bernstein 34th Annual Str5ategic Decisions Conference on Friday at 11:ET.
Original Trade Description: May 26th
F5 Networks, Inc. develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems. The company's primary application delivery technology is Traffic Management Operating System (TMOS) that enable company's products to intercept, inspect, and act on the contents of traffic from virtually each type of Internet Protocol-enabled application. It offers Local Traffic Manager, which provides intelligent load-balancing, traffic management, and application health checking; BIG-IP DNS that automatically directs users to the closest or best-performing physical, virtual, or cloud environment; Advanced Firewall Manager, a network firewall; and Application Security Manager, an Web application firewall that provides comprehensive, proactive, and application-layer protection against generalized and targeted attacks. The company also provides Access Policy Manager, which provides secure, granular, and context-aware access to networks and applications; Carrier-Grade Network Address Translation, which offers a set of tools that enables service providers to migrate to IPv6 while continuing to support and interoperate with existing IPv4 devices and content; and Policy Enforcement Manager that offers traffic classification capabilities to identify the specific applications and services to service providers, as well as Link Controller. In addition, it offers cloud-based and other subscription services; BIG-IP appliances; VIPRION chassis-based systems; BIG-IP Virtual Edition software platform; and management and orchestration software platform. Company description from FinViz.com.
F5 reported earnings of $2.31 that rose 18% compared to estimates for $2.26 and prior guidance of $2.24-$2.27. Revenue rose 2.9% to $533.3 million and beat estimates for $530 million. They have more than $1 billion in cash and only $328.4 million in debt.
For Q2 they guided for revenue of $535-$545 million and analysts were expecting $536 million. They guided for earnings of $2.36-$2.39 and analysts were expecting $2.26.
Earnings July 25th.
There are no August options. We either have to go with July or October and the long ones are too expensive. The Nasdaq is either going to breakout next week or roll over. If it breaks out we could see a decent run into Q2 earnings. That would lift FFIV and give us a gain before the June options expire and premiums begin to fade on July.
Long July $180 call @ $3.95, see portfolio graphic for stop loss.
MTCH - Match Group - Company Profile
No specific news. Shares holding at the post crash high.
Original Trade Description: May 9th
Match Group, Inc. provides dating products. It operates a portfolio of brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, and Pairs. Match Group, Inc. offers its dating products through its Websites and applications in 42 languages approximately in 190 countries. The company was incorporated in 2009 and is headquartered in Dallas, Texas. Match Group, Inc. is a subsidiary of IAC/InterActiveCorp. Company description from FinViz.com.
Match reported earnings on Tuesday of 33 cents that easily beat estimates for 19 cents. Revenue rose 36% to $407.4 million and beat estimates of $386 million. Tinder, their leading revenue generator, added 368,000 paying members beating estimates for 355,000. The CEO said the new Facebook dating service should have no impact on Match because Tinder was the driving force behind their earnings and Facebook has no equivalent application. Match is entrenched and has a loyal following.
The CEO reiterated those comments on Wednesday. Bank of America reiterated a buy rating with a $46 price target.
Match crashed $13 when Facebook made their announcement a week ago. I believe the worst is over since the stock has not decline any further in a week. The close today was a post crash high.
Earnings August 7th.
Long September $40 call @ $3.70, see portfolio graphic for stop loss.
MU - Micron Technology - Company Profile
No specific news. MU was trading at the highest level since 2000 this morning but faded at the close. Needham reiterated a strong buy and raised the price target from $76 to $100. Stifel has a $106 target and Baird is at $100.
Original Trade Description: May 19th
Micron Technology, Inc. provides semiconductor systems worldwide. The company operates through four segments: Compute and Networking Business Unit, Storage Business Unit, Mobile Business Unit, and Embedded Business Unit. It offers DDR3 and DDR4 DRAM products for computers, servers, networking devices, communications equipment, consumer electronics, automotive, and industrial applications; lower power DRAM products for smartphones, tablets, automotive, laptop computers, and other mobile consumer device applications; DDR2 DRAM and DDR DRAM, GDDR5 and GDDR5X DRAM, SDRAM, and RLDRAM products for networking devices, servers, consumer electronics, communications equipment, computer peripherals, and automotive and industrial applications, as well as for computer memory upgrades; and hybrid memory cube semiconductor memory devices. The company also provides NAND products, which are electrically re-writeable, non-volatile semiconductor memory, and storage devices; client solid-state drives (SSDs) for notebooks, desktops, workstations, and other consumer applications; enterprise SSDs for server and storage applications; cloud SSDs; and multi-chip package and managed NAND products. In addition, it manufactures products that are sold under other brand names; and resells flash memory products that are purchased from other NAND Flash suppliers. Further, the company provides 3D XPoint non-volatile memory products; and NOR Flash, which are electrically re-writeable and semiconductor memory devices for automotive, industrial, connected home, and consumer applications. It markets its products to original equipment manufacturers and retailers through its internal sales force, independent sales representatives, and distributors; and through a Web-based customer direct sales channel, and channel and distribution partners. Company description from FinViz.com.
The chipwreck on Friday from the AMAT earnings, caused Micron to drop -2.4%. Given its recent rebound that was minimal. Earlier in the week Stifel reiterated a buy rating and raised the price target to $101. A day later RBC Capital initiated coverage with a buy rating and $80 target. MU closed Friday at $53.
The long awaited decline in DRAM/NAND prices has failed to appear. Micron did say they thought prices would "normalize" the second half of this year. They still reported blowout earnings because prices have been high for the last year due to shortages.
Micron and Samsung, the two biggest memory producers are being smart and not flooding the market with supply as they would have done in prior years. This keeps the prices stable and they are going to normalize at a higher level.
Analysts expect Micron's revenue to grow 44% in 2018 to $29.3 billion with earnings growth of 121%. Yes, 121%. That is up from estimates in February for 40% sales growth and 102% earnings growth. At the end of 2017 analysts were expecting 26% and 60% earnings growth. Despite this monster revenue/earnings growth the stock only trades at a PE of 6. That is less than Ford for a high growth tech stock.
Update 5/23: Shares rallied after the company raised guidance and announced a $10 billion buyback for 16% of outstanding shares. They also announced a technology breakthrough on NAND memory with a 33% increase in speed.
Earnings June 21st.
Long July $57.50 call @ $3.85, see portfolio graphic for stop loss.
BEARISH Play Updates (Alpha by Symbol)
No Current Puts