XLE Looks Positive - Update 2

XLE Daily

Good news is we may have broke out of the congestion and made a higher high and a higher low than the candles since the recent swing low. We're above all the Moving Averages except for the 50sma. Stochastics are not yet overbought. We're continuing to move away from the .382 rather than retest it again. This is all Bullish and supports our trade.

But on the other hand, we're right up against the 50sma which could provide resistance, and put us in a bobble between the 8ema and the 50sma. We haven't yet broken the downward Trend Line. We haven't formed a Bullish candlestick pattern since the recent swing lows, although we may have formed a Double Bottom. Volume is mediocre. This does not paint a particularly Bullish picture.

Bottom line, its an easy decision to hold the trade.

Amazon Bullish Kicker - Exit

AMZN 1 day 14:15 ET

AMZN 3 min 14:15 ET

While I still think we'll get up to at least 109 (top of the gap), I got out today when AMZN was 100.60 (see my 2:19pm ET Tweet) because there is possibly significant resistance at about 100.25 - 100.50 due to:

• Previous double bottom lows at 101.26 and 101.43
• 20 ema
• 100 price round number

Also, its Friday and there are many possible headline risks over the weekend. I think its better to exit with a profit and look to re-enter on a dip.

On the other hand, its possible AMZN will gap up on Monday and run up to the Target, giving no good entry point. If so, then we missed it. So what, there will be plenty of trade opportunities next week. Its better to protect your capital and take a profit, than take a significant risk of a loss when you clearly see possible resistance. Holding over the weekend is very different than monitoring a trade in real time.

Besides, I'd rather be out wishing I was in than be in and wishing I was out.

Result for now:

AMZN Nov 100/105 Call Vertical Bought 1.18, Sold 1.90

190 - 118 = $72 profit per contract

(190-118)/118=61% gain

NVDA Chips are Up

The Daily chart above on NVDA shows a Bullish setup:

• Double/Triple Bottom
• AB/CD pattern confirmed by price exceeding the B point, and on high volume.
• The C point is only a 25.2% retracement. That's Bullish.
• Today and yesterday form a Trend Kicker candlestick pattern.

For a Target, take a look at the following:

The vertical, thick, white line segments show a measured move of the double bottom.

The diagonal, thick, white line segments show the AB=CD measured move.

The 161.8% Fibonacci extension of the green range is approximately 308. This is between the 61.8% and 78.6% Fibs of the yellow range.

Previous swing high was 313.30.

I like a conservative Target of 308.

Near the equity market close today I got an April 14th 290/295 Call Option Spread for $1.71. A spread will greatly reduce the capital at risk, limit the maximum risk to the cost of the spread, and help mitigate the Theta time decay of the long option in the spread.

I entered 2 sell orders. One is a $4.90 limit order for the spread, since it has a maximum value of 295-290=$5.00. The other is to sell the spread with a limit order at the mid-point between the Bid and Ask if NVDA stock price hits 308.

Risk: $171

Reward: It depends how long it takes to hit the Target, but the maximum reward would be $490.

R:R = 490/171 = 1:2.9 which is great.

Fly United to Gartleyville - Update 14

We closed above one of the 2 Trend Lines but not the other. We made a higher high and a higher low. Stochastics are still mid-range. Looks like we might be forming a Double Bottom. All in all, you have to say we're on a Bullish track. 

The next hurdle is closing above the other Trend Line, then above the 50sma, and the final obvious possible source of resistance is the 200sma. Between the 50sma and 200sma, there's a previous swing high at 49.60. That's another possible source of resistance.

It looks like it might be very difficult to get to any of the Gartley pattern targets, but this pattern has a high success rate. So, we're in the fight and we'll keep holding until there's a good reason to exit.