Author: Tim Bovee

Shares: MLNX

Tim Bovee2 Comments

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

Tim Bovee4 Comments

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

Tim Bovee3 Comments

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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The Week Ahead: Prices, retail, housing, industry

Tim Bovee

 

Prices, retail, housing and industry punctuate the week’s economic reporting.

The consumer price index will be published on Tuesday, and the producer price index (final demand) on Wednesday, each at 8:30 a.m. New York time.

Concurrently with producer prices, retail sales stats will be released on Wednesday at 8:30 a.m.

On Friday, look for housing starts at 8:30 a.m. and industrial production at 9:15 a.m.

Friday is also a quadruple witching day, when market index futures and options, and stock options and futures all expire, sometimes making the markets more volatile.

I overlooked it last week, but I will note that my favorite big picture report was released last Thursday: The Z.1 – Financial Accounts of the United States report, which tells us more about money and its uses than we can even dream of knowing.

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FXE Analysis

Tim Bovee3 Comments

CurrencyShares Euro ETF (FXE)

Update 3/26/2018: FXE pushed above the prior high, on March 8, breaking the chance of a downtrend, for now at least. I exited for a loss, with a debit of $1.20 and shares at $119.80.

Shares rose by 1.1% over 26 days, or a +15% annual rate. The options position produced a -37.5% loss for a -526% annual rate.

I have entered a short vertical spread on FXE, which tracks the EUR/USD exchange rate, using options that trade for the last time 42 days hence, on April 20. The premium is a $0.75 credit and the stock at the time of entry was priced at $118.55.

I made the decision to enter the trade in my account based on a downtrend signal from the Fisher Transform metric and an Elliott wave count that suggests a 5th wave down at the Minuette degree within a decline of larger degree.

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