Weekly Update (5/15/2017)

Hey Team,

Every Monday, we analyze trades from the previous week, go over some setups for next week, and provide guidance on long-term investments.

We had a record-breaking week, folks, booking 1780% gains in weekly BIDU calls and many more wins, all while the S&P dropped 0.21% (lol). Job well done.

Let's dive right in.


DDDeep In The Money

We really hope some you jumped in on this trade when we mentioned it on Monday. As you can see, DDD didn't have a down day all week and melted up 29% in 5 days....epic. 

The trend we continued this week was buying into weakness.  BITA and YY pulled the same move as DDD, dropping like a bag of rocks after reporting earnings. Instead of staying down, all three companies bounced sharply off the session lows, and the rally that followed each of them put them past their previous highs from the day before.

These are trending stocks with plenty of eyes on them waiting to “buy the dip.”  Buyers believe that over time the stock will end up higher than where it drops to, so any short-term negative news falls by the wayside. We see clear skies to $22 for DDD, but we are prepared to trim our position if there’s any profit taking.  We’re sitting at over 500% in options gains since we recommended last week, and we love where this is headed.

Takeaway: Buy the dip -- don't purchase your watchlist stocks at recent hights.  Wait for short-term disappointment to cause a steep sell-off, and grab the stocks on your watchlist during the subsequent fire sale.


This Week

MARKET SENTIMENT - THE FANG GROUP:

We grabbed FB and GOOGL weekly options going into the close on Friday.  We played the NFLX and AMZN rally last week (+250% returns), and are waiting on FB and GOOGL to play catchup.

 FB showing healthy consolidation at these levels, possibly prepping for a gap higher.

FB showing healthy consolidation at these levels, possibly prepping for a gap higher.

As we’ve said many times before, the FANG group loves to trade in pairs.  There’s a lot of coverage lately on which stock is going to reach $1,000 first, Amazon or Google, and we see Google taking the lead back away this week.  We bought weekly call options on Friday should the market rip this morning, but we are prepared to average down our position and buy into any weakness here. 

 

WATCHLIST:

Last week, we mentioned oil (USO), materials, and biotech as trades that we were eyeing. USO managed to rally 3% and pique our interests, while materials continued to search for a bottom (still considering a trade here). EDIT stood out to us the most out of our biotech watchlist, running up 3.8% last week.

 

CYBR:

Following the trend in tech, we are looking at CyberArk (CYBR) the most this week.  The recent global cyber-attack has thrown cyber-security to the forefront of the media’s attention.  Dollars are flowing into the sector, and cyber-security will increasingly become a point of focus as retail companies move away from brick-and-mortar and more towards e-commerce.

The stock experienced a 12.4% decline on Friday after an earnings beat, and the stock is nearing a strong support level.  With a trade like this, you have a trend behind you supporting the upside, and the downside is pretty suppressed.  Everyone loves a good comeback story. 

Takeaway: Last week was one of our best weeks to date, with our BIDU calls gaining more than 1780%, DDD screaming higher, and BITA offering us a generous dip-buying opportunity. We're looking eagerly toward the future, but will pick up these new positions on our own terms, and no earlier. Our Platinum Members hear about our trades first, so if you are at all worried about missing a great buy, we highly recommend putting yourself on the waitlist.

 

Happy Trading

- The Minotaur Team