Bottom Fishing

Now that we are into the heart of Earnings season, my list of stocks that are getting beat up post-Earnings is growing. Although I have a full Submarine Basket at the moment – primarily where I would add new positions for these – I am considering creating a 2nd basket.

Here are just some tickers from the growing list of candidates:

$UTX
$LXK
$PII
$CAB
$COL
$TEN
$BIIB (I added to the Submarine Basket on 7/24)

There are also numerous pull-back candidates that are at interesting Buy points. Here are 2 well-known brands:

$FDX
$UPS

 

– DM 9:30 AM CST

 

The Submarine Basket

The strategy for the Submarine Basket has remained the same since inception: find quality stocks that have pulled back to a solid Support area. This support area could be a number of different things:

prior breakout level

moving average

horizontal line that is part of a chart pattern like: head n’ shoulders, a Cup, a Wedge, a common trend-line, etc

base

A few comments about the selection and trade design that is implemented in chosen candidates:

1) I prefer to use Options and specifically will utilize a Bull Risk Reversal (long a Call Spread or Call Fly & short Puts)

2) There are dozens of stocks that meet my criteria each week so the filtering process does take work. One of the first filters I start with is Options (making sure of liquidity, bid/ask gaps, etc).

3) I often see the opportunities arise after an Earnings report

 

– DM 9:30 AM CSt

 

Monthly Options expiration for July

Seems like I do this every 4 days lol

Here is what I have in existing positions that include July monthly Options as part of the trade:

$CRM  I own a 75/82.5/67.5 RRCS. Options Net: -$1.50 and booked stock gain of $9.45. Should go poof

$FLTX  I own a 45/50/55 Call Fly. Options Net: $1.32 and booked stock gain of $.50. Want to get some value from the long $45 Calls

$IACI  I own a 75/80/85/70 Risk Reversal Call Fly (L 75/80/85 CF, S $70 Puts). Options Net: $.53 and booked stock gain of $.45. Sweet spot here with price near $80

$RENT  I am long stock at $57.82 with a 70/65 Collar. Options Net: $1.18. Will likely adjust to an August Collar

$PCP  I am short stock at $207 with a Sep/July 250/200 Risk Reversal (the Puts are the short July $200). Options Net: $.25. The short Puts will assign, short stock get called +$7

$QRVO  I am long stock at $76 with a 85/85/75 Collar Put Ratio. Options Net: $2.03. The long $85 Puts are well ITM so I am not sure if I will adjust or let the position unwind

$XLF  I am long the $25 Calls. Options Net: $.12. Likely goes poof

$CYBR  I am long stock at $40 with $75 Puts. I will let this position unwind for +$33.20

$ESPR  I am long at $76.44 with a 85/75 Put Spread. I will adjust this to August (have short $90 Calls there as other part of the Collar Put Spread)

$JCI  I am long the $50 Calls. Likely goes poof

$MAR  I am long at $59.50 and long a 80/70 Put Spread. I will adjust the PS to a future expiry

$BWA  I am long a 57.5/60 Call Spread. Options Net: $1.74. This CS should go poof.

$HSY  I am short the $90 Puts. Options Net: $.57 and stock gain: $.17. Looking for these short Puts to go poof

$RH  I am long at $90.04 with a 100/100/95 Collar Put Spread. I will adjust to a future expiry

$TSCO  I own a 95/90 Risk Reversal. I am short stock at $90 (hedge). I will exit this Fab 5 position. Options Net: $.22

$DATA  I am long at $97 with a July 120/110 Put Ratio. I will adjust the PR to August

$ROST  I own a 50/52.5/48.75 RRCS. I will exit this Earnings trade

$SONC  I am short the 35/30 Strangle. I am short stock at $29 (hedge). Options Net: $1.04 and booked stock gain: $1.63. I will exit this Earnings trade

$LEN  I am long the 50/52.5/55 Call Fly and short the $47 Puts.  I will exit this Earnings trade

$STZ  I am short the $120 Calls (2x), long the $125 Calls, and short the $115 Puts. Options Net: $2.18 and booked stock gain: $2.20.  I will exit this Earnings trade, remaining Options should go poof

$PAYX  I am long at $44.66 with a 48/47/45 CPS.  I will exit this Earnings trade

$PEP  I am short the $97.5 Calls (2x), long the $100 Calls, and short the $94 Puts. Options Net: $1.88  I will exit this Earnings trade, remaining Options should go poof

$PSMT  I am short the 95/90 Strangle and long stock at $95 (hedge). I want this to go poof. Options Net: $3.22

 

 

– DM 11:00 AM CST

 

Current Buy or Sell Short Stops

Buy Stop:

Puma Bio $PBYI  set at $150 (a very early hedge on short Sep $225 Calls, Submarine Basket)

Autodesk $ADSK  set at $56 (Earnings)

Ulta Salons $ULTA  set at $157 (a very early hedge on short June $165 Calls, 2x size, Earnings)

Sell Short Stop:

Hershey $HSY  set at $90.50 (would be a hedge for short June $90 Puts, Submarine Basket)

Ross Stores $ROST  set at $95.5 (would be a hedge for short June $95 Puts, Earnings)

 

 

– DM 9:40 AM CST

 

 

Position Updates

Due to an increasing amount of questions and comments regarding my positions & trading I recently created a new tab on the Blog for recording my Positions. The goal is to update the info on each account or basket daily for any changes that occur.

Newly added this week that survive to the weekend:

$RENT $WM $XLF $PFE $GMCR $YUM $ZBRA $CTRP

Exits:

$MNST $QLYS $RMD $RL $PTBI Earnings: $CNC $TMO $ORLY $EW $BWLD $NXPI $HAR $EL $RGR $MCK $KSS $LOCO $KING

Here is the Summary:

Positions_05162015

– DM 10:00 AM CST