Coeur Mining Inc. stock trades under the ticker CDE & closed at $11.14/share on 2/1/2021.
CDE looks to have great short-term potential for traders, with a recent bullish MACD crossover & a gap up that is about to punch the 10 Day Moving-Average through the 50 Day MA bullishly.
CDE Stock Price: $11.14
10 Day Moving-Average: $8.81
50 Day Moving-Average: $8.94
200 Day Moving-Average: $7.20
RSI: 65
Coeur Mining Inc. has also experienced a surge in volume the last three days when compared to the prior 90 day period, showing a higher than average interest in their stock.
Given the fact that they gapped up so aggressively yesterday, I would focus on the in-the-money $8 or $9 calls & $11 and $12 puts from a long-perspective.
Overall, it looks like CDE stock still has some room to run & is worth taking a look at for a short-term trade opportunity.
Direxion Daily FTSE China Bear 3x Shares ETF trades under the ticker YANG, and has recently shown technical movement that makes it worth considering for a short-term trade.
YANG closed at $12.76, after climbing 6.69% on 1/29/2021, with a bullish MACD crossover, rising volume & a low RSI.
YANG Share Price: $12.76
10 Day Moving Average: $11.73
50 Day Moving-Average: $15.44
200 Day Moving-Average: $24.47
RSI: 43
YANG’s volume has been increasing recently compared to the prior 90 day’s average, and the recent price crossing the 10 Day Moving-Average shows that there may be some more momentum to continue the growth in price.
Direxion Daily FTSE China Bear 3x Shares ETF has options; I like the $10-11 calls & puts.
Given that this is a 3x levered fund, it may be riskier to sell the puts, whereas owning them will provide more cushion, something that also is worth considering for an ETF that tracks China.
This past year has been an interesting one for watching the performance of stocks & the markets. Between all of the recovery type names, unique ways the TV pundits proposed calculating earnings during the pandemic & market momentum that has been pinned on there being more active participants than usual, there’s been no shortage of entertainment. But something that we haven’t seen much of is people discussing the negative fallout potential that all of this has created.
We all know that stocks take the stairs up, which they’ve been climbing with few faults since March/April 2020, but how far down the elevator ride will be hasn’t really been tested. This may ultimately be more problematic than most folks anticipate the next time around, mainly due to the rapid “recovery” that was made last spring.
A quick dive into the charts of the major indexes shows that the bandaid may be better off being ripped off in the near-term than later.
Breaking Down The Moving Averages Of Major Stock Indexes For 2020 Into 2021
In the last couple of weeks we have seen index levels flirting with their 10 Day Moving-Averages quite a bit, while always managing to break above them slightly & begin to establish new, slightly higher ranges. Something that is particularly troubling about this, is that RSI levels remain on the higher side, while MACD levels are relatively flat.
Treading water is an essential survival skill for maritime activity, but not necessarily the best for your investments & retirement account.
The charts below show how this is bringing major moving averages closer together to levels that may prove to be problematic the next time that even a 10% correction inevitably comes around.
This is the chart for QQQ, tracking the NASDAQ; note the relatively flat MACD levels mentioned before over the last 200 days, minus a few hiccups & the RSI in the last 50 days spending a lot of time cozying up to the 70 level. A 2.23% drop in price level is all that is needed to break below the 10 Day Moving-Average, and the 50 Day Moving-Average is only 4% lower than that.
A 10% correction would push prices below both of these levels in a bearish manner, with the 200 Day Moving-Average 12% below.
Using the SPY chart above, we see that the S&P 500 has even less room for error, with similar RSI & MACD trends as QQQ. SPY’s price level is less than 1% above its 10 Day Moving-Average, with only 3% lower to go to break the 50 Day MA in a bearish manner, and the 200 Day MA 10% below that.
A 10% correction in prices here will leave the 200 Day MA about the same distance below the current price:50 Day MA level.
The Russell 2000 has a bit more breathing room, with the IWM ETF price level being 1.6% above its 10 Day Moving-Average, and the space between the 10:50 Day MAs being an additional ~9%.
Applying a 10% correction would breach the 50 Day MA, but the 200 Day Moving-Average is still another ~19% below that, providing more cushion from a technical perspective.
Then we have the Dow Jones Industrial Average, who seems to have it the worst (although also the smallest sample size by components).
With its price level just .11% above the 10 Day MA, the 50 Day MA is another 2.7% below that & the 200 Day MA is only 9% below that level, making a 10% correction a much larger issue from a technical standpoint.
As you can see, from a technical perspective we are standing on bambi legs, as a healthy move to the downside will have most of these indexes flirting with breaking the longer-term trend.
Much of this is due to the need to place money somewhere for growth, and a lot of speculative bets being made, primarily on technology & medicine, which will also likely make the difference between QQQ & IWM become much closer to the SPY & DJIA levels shown above.
A Correction Sooner Than Later Will Be Beneficial To Rip The Bandaid Off
I added in the 200 day & 50 day yardsticks above, as it highlights that there is an additional problem posed by the rapidness of the market’s recovery. The recovery speed of last spring for the most part outpaces the performance of the more recent time periods, which is somewhat of a life-ring for the longer-term moving averages shown above.
Using the QQQ ETF again, I added in an additional yardstick at the 150 day ago mark. Note that the 200-150 day ago period QQQ grew by almost 22%, while between 150-50 days it increased another 16%, followed by ~15% growth in the last 50 days. That rapid spring recovery is a major reason why the 200 Day Moving-Average has the spread between the 50 Day MA that is currently enjoys.
Looking at the S&P 500 via SPY, we note the same thing; 12.6% growth in the 200-150 day ago period, followed up by 15% growth in the 150-50 day window & only 8.2% growth in the previous 50 days.
The Russell 2000 IWM ETF has fared the best, with 19% growth in the 200-150 day window, followed with increasing growth, with 22.5% gains in the 150-50 day window, and 24.5% growth in the last 50 days. This is why their 200 Day Moving-Average has shown the best amount of cushion for any pricing pullback out of everything shown as examples here.
The Dow Jones Industrial Average has the worst recovery:recent growth story, to be expected based on our last DJIA chart. With 10% growth in the 200-150 day window being followed by a 13.7% increase in the 150-50 day period, and only 5.4% growth in the last 50 days.
Tying It All Together
All-in-all, if we continue to tread water the way we have been compared to last spring’s recovery growth, this will only make the major moving averages get closer together. This will then make any normal correction become potentially much more dangerous, as the downside movements in price will come much closer to breaking the long-term trend, if they don’t blow right through them.
With this in mind, it is becoming more & more essential for traders & investors to have a hedging strategy in place, and be ready to actively trade during the upcoming downward motion, whenever it ends up happening. It appears that the sooner it takes place the better it will be, as otherwise there will be more obstacles to overcome from a technical perspective.
Perhaps its best if the bandaid is ripped off now, before a cast & sling are required later on down the line…
Charter Communications Inc. stock has recently shown great technical strength, making it worth considering for a short-term trade opportunity.
CHTR stock closed at $650.43/share on 1/21/21, while completing a bullish MACD crossover into a new uptrend.
CHTR Stock Price: $650.43
10 Day Moving-Average: $632.33
50 Day Moving-Average: $646.22
200 Day Moving-Average: $584.68
RSI: 55
Given CHTR’s low RSI value & recent volume behind their upwards movement, this trend looks to have more room to run.
CHTR stock also has options that traders can take advantage of.
Looking at the 2/19 expiration date, the $650 calls are just in-the-money, although they may be lacking in liquidity as there is a very low open interest (13 as of writing this), which is something traders should be mindful of.
In the case of CHTR I’m not certain that I would be quick to sell any puts here, as in the event of a 10% correction, their price would be flirting with their 200 Day Moving-Average on a downtrend, which would be a bearish flag.
If I were going to, I may think to look at the $540 range for a strike price, which would give you an additional ~7% cushion for further declines in price.
All-in-all, Charter Communications Inc Stock looks to have a lot of good opportunities for short-term traders to take advantage of.
National Beverage Corp. stock trades under the ticker FIZZ & has recently shown technical strength, making it worth examining closer for a short-term trade opportunity.
FIZZ stock closed at $88.67 on Friday 1/15/2020, while making a bullish MACD crossover & breaking above their 50 day moving-average bullishly.
FIZZ Stock Price: $88.67
10 Day Moving-Average:$83.31
50 Day Moving-Average: $85.82
200 Day Moving-Average: $67.37
RSI: 58
FIZZ’s 10 Day Moving-Average is 3% away from a bullish crossover of their 50 Day Moving-Average, which seems unavoidable given their price-per-share is 3%+ higher than the 50 Day MA.
FIZZ stock has options that traders can capitalize on, with the $90 2/19 expiration calls looking particularly appealing, as they’re ~1% away from being at-the-money.
If one were thinking of selling puts for the same expiration, the $75 strike price may be best, as should there be a normal 10% correction the $80 strikes would be at-the-money, while the $75’s would still need further decline in price.
Even factoring in their beta of 1.37, that still looks like the safer level for selling.
Overall, National Beverage Corp.’s stock looks to still have room to move to the upside, and should be on any short-term trader’s radar.
Carrols Restaurant Group, Inc. stock trades under the ticker TAST, and is currently trading at $6.78/share.
TAST stock is set up for potential upside movement, with their bullish MACD cross yesterday, and is currently on a 5.6% upswing day as I write this post (late, yes I know…)
TAST Stock Price: $6.78
10 Day Moving-Average:$6.34
50 Day Moving-Average: $6.27
200 Day Moving-Average: $5.50
RSI: 59
TAST stock looks to have some room to run in the short-to-medium term, that can be beneficial to traders of the common shares & options alike.
Their $7.50 calls expiring on 2/19, along with the $7.50 puts are likely the best place to be looking, given the lower level of open interest & volume that I am seeing for the in-the-money $5 calls.
All-in-all, traders should be able to take advantage of the momentum that Carrols Restaurant Group Inc. stock is currently experiencing, and be able to take home some short-term gains on TAST.
Immunovant Inc. stock trades under the ticker IMVT & closed at $46.77/share on 1/11/2021.
After recent technical movement, IMVT stock is worth taking a closer look at for a short term trade opportunity.
IMVT Stock Price: $46.77
10 Day Moving-Average: $47.25
50 Day Moving-Average: $48.50
200 Day Moving-Average: $32.80
RSI: 46
Immunovant Inc. stock has been stuck relatively rangebound for the last few months, and the overall market movement will likely dictate its next move.
IMVT’s MACD is also interesting, as it looked ready for takeoff until yesterday, whereas now it could be replicating its moves from mid-December, where the MACD almost had a bullish cross, but ultimately had a significant downtrend, while prices remained rangebound (which also happened in August, citing the bottom of the chart above).
Despite a few recent consecutive strong days, yesterday it far outpaced the NASDAQ on a downward move, losing 5%+, VS. QQQ’S loss of 1.45%.
IMVT stock has options, and I am favoring the $45 strike price, looking for February’s expiration date.
Given the general market’s iffy footing, the $45 puts look appealing, as they can be bought at a 3:2 ratio vs. the $50, while still saving ~14% of capital, which enables safer hedging than holding 2 $50 contracts.
On the upside, I still also like the $45 calls, given how tightly range bound they have been recently, and the average percentage of their gaps to the upside & downside, with 5 weeks until expiration.
The one caveat is that the NASDAQ itself is not looking as technically solid as it has all year, so there may be more downside than upside here, but given that nature of IMVT stock’s strength this year, traders of options have a great opportunity, and traders of common shares should be on the lookout for when they see a bottom.
Citizens, Inc. stock trades under the ticker CIA, and closed at $6.13/share on 1/7/2020.
CIA stock has recently shown strong technical performance, including a recent MACD bullish-crossover, making it worth considering for a short-term trade.
CIA Stock Price: $6.13
10 Day Moving-Average: $5.85
50 Day Moving-Average: $6.06
200 Day Moving-Average: $5.86
RSI: 54
CIA’s 10 Day Moving-Average is about to bullishly cross its 200 Day MA, and it is in a prime position to also cross the 50 shortly thereafter.
CIA has options that traders can capitalize on in addition to their common shares.
With their MACD crossover & RSI being right in the middle range, there seems to be bullish upside to holders of the common stock.
From an options perspective, I like the $5 calls, as the $7.50’s, as there would need to be tremendous upside (~22%) from the current price for those to go in-the-money.
The current premium on the $5 puts is low, so not certain it would be worth selling those, nor do I think there would be many interested buyers, given that the current open interest is 0, and for these to go in-the-money it would require a similarly large drop in share price (~18%).
Overall though, it does appear that Citizen’s, Inc. stock has more room to run to the upside, and should be something on any short-term trader’s radar.
Bed, Bath & Beyond stock has recently shown technical strength that is worth taking a closer look at for a short-term trade.
Trading under the ticker BBBY, they closed yesterday at $19.76/share, on strong volume for the last few months, indicating that there is at least short-term momentum for further price movement.
BBBY Stock Price: $19.76
10 Day Moving-Average: $18.75
50 Day Moving-Average: $20.10
200 Day Moving-Average: $12.86
RSI: 54
Their MACD is beginning to curl up, showing signs of a possible breakout to the upside, which is also confirmed by the price about to cross the 50 Day Moving-Average, bringing the 10 Day Moving-Average along with it, a bullish signal.
Since BBBY stock also has options to trade, buying the $19 calls with the 1/8 expiration seems appealing in this instance, while selling the $19 puts with the same expiration date can also yield a little more money.
Overall, it appears that Bed, Bath & Beyond stock has more room to run, making a great opportunity in the near-term for traders of common shares & options alike!
Elanco Animal Health Inc. stock trades under the ticker ELAN, and closed at $29.95/share on 12/16/2020.
ELAN stock is worth taking a closer look at from a short-term trade perspective, as they recently had a bullish MACD crossover – particularly for options traders.
ELAN Stock Price: $29.95
10 Day Moving-Average: $29.35
50 Day Moving-Average: $30.76
200 Day Moving-Average: $25.33
RSI: 50
With an RSI that is even at 50, and the bullish MACD crossover, it looks like ELAN has some room to run.
The $30 calls are at-the-money as of the premarket, with a delta of 0.49, and their $29 calls offer a higher delta at 0.83, with less theta risk at only -0.07 (vs. -0.11 for the $30’s).
From a puts perspective, the $32 & $33 options seem to make the most sense if you’re viewing the December 18th expiration (tomorrow), as they are already in the money.
Looking into January expirations though, there may be some value to the $31 puts while ELAN stock tries to continue climbing, while establishing a trading range.
