Shares: EL

The Estée Lauder Companies Inc. (EL)

Update 3/22/2018: EL reversed the day after I entered, and on the second day gave a downtrend signal on the Fisher Transform. I exited for a loss.

My shares position declined by 1.5% over the two-day holding period for a -264% annual rate.


I have entered a long shares position on EL at a debit of $147.68 per share.

I made the decision to enter the trade in my account based on a high expectation of a positive earnings surprise, a bullish Zacks rank, an uptrend signal on the daily Fisher Transform and an Elliott wave count that shows, somewhat ambiguously, that EL in an uptrend. The rise from 2016 is poorly differentiated, but it appears to me to be in a 5th wave up in the rise since April 2017.

EL publishes earnings May 2  before the opening bell.

 

By Tim Bovee, Portland, Oregon, March 16, 2018

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The Week Ahead: FOMC, homes, durables

The Federal Open Market Committee meets for two days beginning Tuesday, culminating with an announcement and fresh forecasts on Wednesday at 2 p.m. New York time and a news conference with Fed Chairman Jerome Powell at 2:30 p.m.

The FOMC last raised the target federal funds rate by 25 basis points to 1.25-1.50% on Dec. 14, 2017. A year ago the committee raised rates in March 2017 following a December 2016 increase. Based on that history an increase seems more likely than not, and also totally unsurprising and well priced into the markets already.

Otherwise, the week’s focus is on real estate, with existing home sales out on Wednesday at 10 a.m. and new home sales on Friday at 10 a.m. Also hitting the Street during the week, durable goods orders on Friday at 8:30 a.m.

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Shares: MLNX

Mellanox Technologies Ltd. (MLNX)

3/19/2018: MLNX reversed with a downtrend signal from the Fisher Transform and I exited for a loss.

The shares position produced a 2.2% loss over three days for a -272% annual rate.


I have entered a long shares position on MLNX. The stock at the time of entry was priced at $73.95.

I made the decision to enter the trade in my account based on expectations for a positive earnings surprise, and longer-term bull rating from Zacks, a Fisher Transform uptrend signal on the daily chart and a bullish Elliott wave count.

The position is contrary to the trend of the equities markets as a whole, which are bearish according to the Elliott wave count.

MLNX publishes earnings on April 25 after the closing bell.

sym entry exit result (%) annualized (%) entry date exit date
MLNX 73.95 3/16

By Tim Bovee, Portland, Oregon, March 16, 2018

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DVN Analysis

Devon Energy Corp. (DVN)

Update 4/2/2018: The broad market decline that began in late January added another down day to the charts, and DVN like most stocks was part of it. I exited for a $0.23 debit, or 59.6% of maximum potential profit, with shares at $30.44.

Shares declined by 5.2% over my 17-day holding period, or a -112% annual rate. The options position produced a 147.9% return for a +3,174% annual rate.


I have entered a short vertical spread on DVN, using options that trade for the last time 35 days hence, on April 20. The premium is a $0.57 credit and the stock at the time of entry was priced at $32.12.

I made the decision to enter the trade in my account based on implied analyst expectations of a negative earnings surprise, a downtrend in the stock price within the context of a bearish market..

DVN publishes earnings on May 1 after the closing bell.

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X Analysis

United States Steel Corp. (X)

Updated 3/23/2018: X as it turned out was a play dependent upon the rhetoric and actions in Washington and capitals of the major powers more than on the risk/reward analysis I bring to my trades. 

The steel company’s shares fell sharply with the broad markets after the U.S. president announced tariffs globally on steel and aluminum, recovered less than the markets as a whole in response to the decline, and then fell sharply on March 22, a day before my exit, as the U.S. announced tariffs on China 

The decline continued the next day, and I exited late in the day as my profits reached 53.8% of their potential maximum. I exited for a debit of $0.36 on the options spread with shares at $34.22.

At exit, shares had declined 12.8% over nine days, for a -519% annual rate. The options position produced a 102.8% return for a +4,168% annual rate


I have entered a short vertical spread on X, using options that trade for the last time 65 days hence, on May 18. The premium is a $0.78 credit and the stock at the time of entry was priced at $39.24.

I made the decision to enter the trade in my account based on expectations of a negative earnings surprise as reported by Zacks, a downtrend signal on the Fisher Transformer and a bearish Elliott wave analysis. My view of the markets is that they have been in a significant downtrend since the Jan. 26 peak, and so I chose to trade a symbol with bearish metrics.

X publishes earnings on April 24 after the closing bell.

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