Picks for July 5, 2013: $UA, $MCD, $XONE, $LULU, $AXP, $TLT, $GOOG

Happy 4th everyone!  With a half day of trading yesterday, the market has some time to “marinate” and hopefully make an indication of which direction it is going to take.  So let’s begin with some picks:

$UA:  I believe this stock is very strong.  A close above 60.96 looks to be a great long entry point.  However, if you want to be aggressive and believe we are going higher, you can enter on a 15min indication.  Indicators are pointing up, but I would ideally like to see volume increase on the bullish move.  UA_JULY_5_2013

$MCD:  It looks like we are breaking out of a short term bearish channel.  You may want to wait for a close above 100.55 or if you want to be more aggressive, you could take a 15min bullish trade.  Target is 102.75.MCD_JULY_5_2013

$XONE:  It looks like this bubble is bursting.  Notice the speed lines I drew.  The most recent line prior to yesterday’s drop is almost vertical.  I think this has a ways to drop.  My target is $53.45 or the speed line I highlighted.  Moreover, yesterday’s candle was a bullish-engulfing candle.  My stop will go above the first 15min candle.  This is definitely a 15min entry.XONE_JULY_5_2013

 

$LULU:  Bracket trade here:  I think the stronger probability is a bearish trade, but the bulls can still win out.  Bearish I like an entry of 63.80 with target of 61.60 and 59.65.  On the bullish side I like an entry of 66.85 and a target of 70.40.LULU_JULY_5_2013

 

$AXP:  What the heck, I’ll do one more since it’s a holiday.  AXP also looks like a bracket set-up.  Bearish entry is a close below 72.90 with a target of 70.45.  Bullish, I like an entry of 76.30 with a target of 78.20.AXP_JULY_5_2013

A couple of other little bonuses:

$TLT: I still like this short with a target of 107.78.  15min entry.

$GOOG:  I still like our entry of 895. with a target of 920.

Enjoy the rest of your holiday and happy trading!

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10 thoughts on “Picks for July 5, 2013: $UA, $MCD, $XONE, $LULU, $AXP, $TLT, $GOOG

  1. UA, nice bull flag on weekly and monthly charts
    MCD, again nice bull flag on weekly charts and looks to have broken higher downward trend line as you stated
    XONE, always wary of trading against strong trend, but if you can catch the tops…
    LULU is a tough call, from the daily chart I would say in bearish trend, but on the weekly chart, looks to be finding support, I would agree bearish
    AXP, weekly and monthly chart are bullish and after gap down had an up day Wed – bullish
    TLT, really good bear flag on daily
    GOOG, strong bull weekly and monthly charts, and I like the consolidation on the daily chart over past month with bollinger band squeeze, look for breakout soon, direction is the hard thing to predict

    I am looking at xom and bby for Friday, purely based on 3 inside day pattern, direction will depend on market tomorrow, sort of like your bracket orders above

    I again back tested this pattern as a stock (wish I could back test as option)…went about 10 years back and results going long and short gave about 80% winning percentage…shot for a 7% profit target with no stop and had a 100 day maximum time limit…we’ll see

    good luck tomorrow

    Jose (Molina)

  2. Mark,
    Also, the only options, based on their ask bid spread, that I would buy are MCD, LULU, and AXP. The others have ask/bid spreads to wide for me…would already be down 10% or more as soon as you purchased the option.

    Jose

    • Jose,

      While I agree you wouldn’t want to start a trade down due to a big spread, you can always set a limit order to minimize this risk. You may not get filled, but at least you wouldn’t be starting in a big hole if you do get filled.

      To answer one of your questions, I usually buy options 2 months out. How far out do you buy yours? I also always buy ITM options.

      -Mark

      • Thanks, I had read something about having better results with penny wide options???

        That backtesting showed me I need to have at least 100 days for the high winning % so I am buying Nov, Dec and Jan 14 strikes to give me that time…again a good friend of mine thought I was crazy buying so much time…we’ll see

        Good trading to you

        Jose

      • To be honest, I have been thinking about switching to buying more time so that I can hold longer without worrying about time decay. Obviously the options are more expensive, but you wont get killed if the stock meanders for a couple of weeks.

        I don’t disagree that you want minimally wide bid/ask when playing options, but if there is something you really want to get in on, a limit order can help.

        I assume you always buy ITM?

        -Mark

      • See, I used to trade like that until it was pointed out to me that by buying out of the money, your options have no intrinsic value. But maybe buying that far out it wouldn’t matter as much? I’m not sure if that’s the better play or not. hmmm.

      • I know that is what my guru friend told me, but it has been working fairly well, if the underlying moves all the options will move…now buying closer to atm and with less time gives your more delta, but I need a low premium (that is my 2% risk) and more time…I will continuing using it as long as it works…send me an email and I will send you my excel sheet with all my past buys for the last 7 months

        Jose

  3. I closed out two puts today which I had until December…I close out too soon but they were at my 30% target (they look to be another 20% up now, ahhh). I will also probably start waiting till end of day before I start closing out positions

    got into xom and bby today…little worried about bby as many people on stocktwits believe it is going to fall hard, but I have never had much success listening to others, haha

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