The Dow slipped well under its 50-day moving average. It’s now challenging prior support. If it fails that support, we could drop to 17,612, which we’ve long talked about.
In the meantime, we are holding all of the new trades issued as part of the special report. On purpose, we issued long-dated calls, knowing there would be near-term volatility in the market. Most of the names we’ve recommended are strong names. They’re not going out of business. They’re simply down on rough times and need patience.
On June 1, we issued a buy on the KORS January 50 call at $3.90. Shortly after, the stock began to bounce from our oversold indicators. The trade is now up to $4.40 a contract. I’m not concerned about the long-term performance of the stock. There’s a massive gap that needs to be filled.
On June 1, we also issued a buy on the Best Buy (BBY) December 35 call at $2.60. It last traded just under $2.80. This is another stock I’m not concerned about. It’s not going out of business. It’s an oversold stock with reversing technical indicators telling me there’s upside with patience.
The NSC December 95 calls are underwater. But it remains on hold. Here, too, we have a technically oversold situation with a stock at support. MACD sits at a negative 2.42. That’s not sustainable.
The WMT January 75 calls – bought at $3.40 on June 3 – also remain on hold. WMT isn’t going out of business any time soon. The trade needs patience with a directionless market.
The AMBA August 100 put is also on hold. The stock is still greatly overvalued, and over-extended on all technical patterns. In the past, when our technical patterns become this over-extended we tend to see reversal.
We also hold the newly issued trade on Twitter with the TWTR January 37 call. The underlying stock sits at strong support levels with oversold reads on MFI, MACD and RSI.
These trades need patience. They will not pay off within a week’s time. But once they start moving – and they will move – the payout will be great.
Ian L. Cooper
Rapid Retirement System