The market can’t handle the Wednesday upside and starts a stronger reverse, states Jon Johnson of Investment House Daily.
The data was decent, and stocks rose. Then, they gave their gains back. After a modest agreement between Russia and Ukraine regarding humanitarian aid is hammered out, stocks rose. Then, they fell.
The Nasdaq (NQ=F) posts an ugly gap higher that reverses, but all indices hold the recent range—the jobs report was ahead.
The jobs report was anticipated to beat expectations, given the vaunted Automatic Data Processing (ADP) report—oh, that’s a good one! The key to Friday was how the initial move on jobs would hold.
Ah, you have to love this market. On Wednesday, all was well. Stocks rebounded from an ugly Tuesday that saw the PHLX Semiconductor Sector (SOX) get hammered. The SOX is an important market leader, and you also need to note that the SOX was far and away the loss leader on Thursday. The Nasdaq and the Nasdaq 100 were quite weak, particularly if you look not just at the percentage loss, but the nature of the loss—the indices gapped higher and then completely reversed to a loss.
Targets Hit
Here are four completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:
Alcoa Corp. (AA): Industrial metals are continuing to show their strength, as supply issues push prices higher and higher. Steel lagged a bit, but it broke out over the past week. There was no such lag in the aluminum market, though. Prices have been up astronomically over the year and are still rising. Their patterns are quite strong as well. AA rallied well for us off of the 50-day moving average (MA) from late January, and when it started to test that move in late February, we had plans for a new position.
AA peaked at $80 and then started a test. It faded to the 20-day exponential moving average (EMA) and then bounced. On February 28, it paused to test that bounce, and that is when we issued the alert to enter.
We issued an alert to buy April $80 call options for $7.00. AA closed lower at the end of that session but held its near support at the 10-day EMA. During the next session, AA shot higher even though it closed well off the intraday high. After that, there was a steadier move higher from Wednesday into Friday. On Friday, AA hit our initial target.
We issued an alert to sell half of the position for $12 in order to generate a nice 70% gain. Now, we are going let the other half work higher, if it can. We also took gains this past week in the following positions:
Lightbridge Corp (LTBR): 25.4% gain in the stock.
Freeport-McMoRan Inc. (FCX): 90.9% gain in the options.
Harmony Gold Mining Co. (HMY): 20% gain in the stock, 63.3% gain in the options.
Here are three completed trades from Technical Trader Alert, offering insights into our trading strategy and the targets that we have hit this week:
Newmont Corporation (NEM): Sometimes gold is all that glitters, to steal from and bastardize J. R. R. Tolkien’s series, Lord of the Rings. There are reasons as to why gold is running, but we really do not need to go into that right now. It is enough to say that there are reasons, and those reasons are driving good setups.
We saw one of our favorite mining stocks, NEM, break out over the 200-day simple moving average (SMA) with a decent rally. Rallies beget tests, and breakout tests are one of our favorite entry points. A nice tap down to the 10-day EMA set NEM up for its next run.
We put it on the report, and on March first, NEM broke higher again. We issued an alert to buy May $67.50 call options for $5.20. The move was straight up from there. Even though these trajectories can be volatile, NEM marched straight up for four sessions and hit our initial target.
So, we issued an alert to sell half of the options position for $12.05 in order to bank a 49% gain. While we just made dollars on a gold stock, you need to be sure to convert some of those dollars into actual gold. Such a decision makes sense during these inflationary times.
We also took gains in the following positions this week:
ConocoPhillips (COP): 26% gain in the options.
Southern Copper Corp. (SCCO): 100% gain in the options.
Here are several completed trades from Success Trading Group, offering insights into our trading strategy and the targets that we have hit this week:
Lightbridge Corp: There are nice setups, but if you look up the definition of “nice stock setup,” you would see an October 2021 to late February chart of LTBR. After a rally to a peak into November, LTBR fell into a cup-shaped base. From late December to late February, LTBR formed an almost textbook inverted head-and-shoulders pattern with the 200-day SMA more or less the neckline—that gave a really good, and very clear, breakout point.
We had LTBR on our watch-list while we were at the Las Vegas MoneyShow//Traders Expo, but on February 28, it obliged us with a breakout from the pattern. It then surged through the 200-day SMA. We were ready for the play and issued a buy alert for $7.38. LTBR surged during that session and hit our target. We issued the alert to sell half of the stock for $8.22 and banked an 11.3% gain. We let half of the position run because the breakout move was so strong. LTBR started higher during the next session and then rallied a bit higher. After that, however, the stock started to stall. It then looked as if it might decide to test the big move. Okay, we issued an alert to sell the other half of the position for $8.56 in order to bank a 15.99% gain.
We also banked gains in the following positions this week:
Cleveland-Cliffs Inc. (CLF): 7.47% gain in the stock.
Diana Shipping Inc. (DSX): 5.93% gain in the stock.
Fluor Corp. (FLR): 4.13% and 4.49% gains in the stock.
Ferroglobe PLC (GSM): 15.91% gain in the stock.
Kroger Co. (KR): 9.89% gain in the stock.
Laredo Petroleum Inc. (LPI): Laredo Petroleum, Inc., is currently trading at $78.28. The March 18 $80 Calls (LPI20220318C00080000) are trading at $4.50. That provides a return of about 9% if LPI is above $80 by the expiration.
Learn more about Jon Johnson at InvestmentHouse.com.
