Rocket Equities & Options Report 04-19-21
Monday Report - April 19th, 2021
Markets have started Monday trading slightly lower, with yields somewhat flat at 1.61% for the 10 year note.
SPY is trading at $415.28. Friday, we initiated a SPY debit put spread from $417 - $415, which expires this Friday, at a cost of about $0.70. Place an order to sell this SPY put spread for $1.40. We've got the SPY trading at $415.32 and want our order in to sell. Our put spread is trading at about $1.00 right now with the SPY at $415.25, so we will need some more negative market action to have a chance at getting executed but get your order in.
The SPY has risen for 4 straight weeks and is bumping up against the upper boundary line of its uptrend channel. We initiated a SPY debit put spread from $417 - $415, which expires Friday, at a cost of about 0.70. I like the risk vs. reward of looking for a slightly negative market this week. This market is poised for a strong few months as we reemerge from Covid restrictions, yet so much of that optimism is already priced in and we could trade flat to slightly lower as reality catches up to the expectations of a brighter future already priced into many equities. We get some big names this week in earnings, with NFLX, SNAP, IBM, Procter & Gamble, Chipotle, AT&T, and many others reporting. Earnings season kicks into high gear next week with many of the big tech stocks reporting numbers. We will look to sell our debit put spread this week if we get any type of a decent pull back in the market, and I don't expect we'll try and hold it until Friday.
DIS is trading at $190.05. We bought DIS at $118.63. Disney popped high on the open with many parks in California selling out tickets as fast as they can make them available. Disneyland resort in California is already sold out for weekends through May. Disney's Florida parks have been open since July. DIS is trading just off its all-time high as the market waits movie theaters and amusement parks to again reach capacity, which is hopefully not too far in the distant future. Movie theaters still have a few months until showings start delivering thriving crowds this summer. We want to see Disney trade through the $190 area, which has been an area of short term resistance, with volume. Disney has strong support at the $183 price level.
CRM is trading at $231.91. We bought CRM at $215.35. CRM consolidated last week after trading higher. In last week's update we talked about wanting CRM above $230.50, which correlates to the high from Feb 26th following their last earnings announcement. We now want to see it hold this price level. It made it to $234.00 Friday.
WMT is trading at $140.04. We bought WMT at $140.91. WMT continues to chop around the $140 area. WMT looks to be consolidating near the lower price point of the gap from February of earlier this year. It is now also trading just above its wide bar from its breakout area on August 27th, which traded almost 40 million shares. WMT is perfectly positioned to benefit from the stimulus bill, while providing some exciting growth prospects. Next stop for WMT is $144.50, which will close the gap from February. WMT also has a dividend yield of 1.57% right now at this price level.
MCD is trading at $232.18. We bought MCD at $216.91. MCD traded to new all-time highs Friday reaching $234.26. MCD is now in an ABC up formation which will take it up to $255.76. MCD passed its B point with 14+ million shares traded on a weekly basis vs. 10.5M and 9.5M at its B point back in October of last year. MCD has a dividend yield of about 2.21% right now at this price level.
UBER is trading at $59.32. We bought UBER at $31.50. UBER continues to chop around near the upper boundary of its consolidation area. As I stated a couple weeks back in a previous letter... "Uber's food delivery business may take a bit of a short-term hit as we overcome COVID, but their ride sharing business is about to explode and the chart is pushing all time highs rightfully so. Next stop for Uber is its high of $64.05."
Companies reporting earnings that are on our radar this week:
Tuesday: Johnson & Johnson, Harley-Davidson (HOG), Procter & Gamble (PG), Lockheed Martin (LMT), before market open; Netflix (NFLX) after market close
Wednesday: Anthem (ANTM), Nasdaq (NDAQ), Halliburton (HAL), Verizon Communications (VZ) before market open; Whirlpool (WHR), Chipotle (CMG), Spirit Airlines (SAVE), Las Vegas Sands (LVS) after market close
Thursday: DR Horton (DHR), Blackstone (BX), AT&T (T), Quest Diagnostics (DGX), American Air Lines (AAL), Biogen (BIIB), Southwest Airlines (LUV), before market open; Boston Beer Company (SAM), Snap (SNAP), Intel (INTC) after market close
Friday: Schlumberger (SLB), American Express (AXP), Honeywell (HON) before the open.
Stay tuned for updates!
SPY is trading at $415.28. Friday, we initiated a SPY debit put spread from $417 - $415, which expires this Friday, at a cost of about $0.70. Place an order to sell this SPY put spread for $1.40. We've got the SPY trading at $415.32 and want our order in to sell. Our put spread is trading at about $1.00 right now with the SPY at $415.25, so we will need some more negative market action to have a chance at getting executed but get your order in.
The SPY has risen for 4 straight weeks and is bumping up against the upper boundary line of its uptrend channel. We initiated a SPY debit put spread from $417 - $415, which expires Friday, at a cost of about 0.70. I like the risk vs. reward of looking for a slightly negative market this week. This market is poised for a strong few months as we reemerge from Covid restrictions, yet so much of that optimism is already priced in and we could trade flat to slightly lower as reality catches up to the expectations of a brighter future already priced into many equities. We get some big names this week in earnings, with NFLX, SNAP, IBM, Procter & Gamble, Chipotle, AT&T, and many others reporting. Earnings season kicks into high gear next week with many of the big tech stocks reporting numbers. We will look to sell our debit put spread this week if we get any type of a decent pull back in the market, and I don't expect we'll try and hold it until Friday.
DIS is trading at $190.05. We bought DIS at $118.63. Disney popped high on the open with many parks in California selling out tickets as fast as they can make them available. Disneyland resort in California is already sold out for weekends through May. Disney's Florida parks have been open since July. DIS is trading just off its all-time high as the market waits movie theaters and amusement parks to again reach capacity, which is hopefully not too far in the distant future. Movie theaters still have a few months until showings start delivering thriving crowds this summer. We want to see Disney trade through the $190 area, which has been an area of short term resistance, with volume. Disney has strong support at the $183 price level.
CRM is trading at $231.91. We bought CRM at $215.35. CRM consolidated last week after trading higher. In last week's update we talked about wanting CRM above $230.50, which correlates to the high from Feb 26th following their last earnings announcement. We now want to see it hold this price level. It made it to $234.00 Friday.
WMT is trading at $140.04. We bought WMT at $140.91. WMT continues to chop around the $140 area. WMT looks to be consolidating near the lower price point of the gap from February of earlier this year. It is now also trading just above its wide bar from its breakout area on August 27th, which traded almost 40 million shares. WMT is perfectly positioned to benefit from the stimulus bill, while providing some exciting growth prospects. Next stop for WMT is $144.50, which will close the gap from February. WMT also has a dividend yield of 1.57% right now at this price level.
MCD is trading at $232.18. We bought MCD at $216.91. MCD traded to new all-time highs Friday reaching $234.26. MCD is now in an ABC up formation which will take it up to $255.76. MCD passed its B point with 14+ million shares traded on a weekly basis vs. 10.5M and 9.5M at its B point back in October of last year. MCD has a dividend yield of about 2.21% right now at this price level.
UBER is trading at $59.32. We bought UBER at $31.50. UBER continues to chop around near the upper boundary of its consolidation area. As I stated a couple weeks back in a previous letter... "Uber's food delivery business may take a bit of a short-term hit as we overcome COVID, but their ride sharing business is about to explode and the chart is pushing all time highs rightfully so. Next stop for Uber is its high of $64.05."
Companies reporting earnings that are on our radar this week:
Tuesday: Johnson & Johnson, Harley-Davidson (HOG), Procter & Gamble (PG), Lockheed Martin (LMT), before market open; Netflix (NFLX) after market close
Wednesday: Anthem (ANTM), Nasdaq (NDAQ), Halliburton (HAL), Verizon Communications (VZ) before market open; Whirlpool (WHR), Chipotle (CMG), Spirit Airlines (SAVE), Las Vegas Sands (LVS) after market close
Thursday: DR Horton (DHR), Blackstone (BX), AT&T (T), Quest Diagnostics (DGX), American Air Lines (AAL), Biogen (BIIB), Southwest Airlines (LUV), before market open; Boston Beer Company (SAM), Snap (SNAP), Intel (INTC) after market close
Friday: Schlumberger (SLB), American Express (AXP), Honeywell (HON) before the open.
Stay tuned for updates!
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