Mid-Market Update for 6/29/2017

Nike’s (NKE) Quarter Baked Into the Cake

12:50pm (EST)

Shares of Nike (NKE) have rebounded off their May and June low just south of support at $51. This is considered a “double-bottom” by technicians and represented a short-term buying opportunity. The stock is currently battling the 50-day moving average and resistance at $53.50-$54.

Earnings are due out after the closing bell with Wall Street expecting a profit of $0.50 a share on revenue of $8.63 billion. The company cut 2% of its global workforce mid-month but did not issue a warning that earnings, or revenues, will come in shy. However, with inventory likely building, and one suit and tie saying 2018 guidance could be lowered, a miss could be in the mix.

The low estimate has Nike’s numbers coming in at $0.45 a share on sales of $8.54 billion. Bullish estimates are at $0.53 a share on revenue of $8.8 billion. Given the competitive nature of athletic wear, I can imagine an earnings miss is possible but not up to a nickel. However, a disappointment could shutter fears of a significant pullback, especially if 2018 doesn’t look too hot.

I’ve been looking at both call and put options for a possible trade but it’s hard to short a Wall Street sweetheart heading into an earnings announcement. Perhaps there is a trade afterwards, once the dust settles, but there is no need to get greedy when the company has been known to surprise to the upside over the years.

This week’s action has been frustrating as my trigger finger has been itchy to get into New Trades. While disappointed, it is useless firing away at random trades, especially if you have prepared for whipsaw action. The nearly 2% swings in Tech the past three sessions has likely damaged a lot of rookie traders. I spent a ton of time talking about stretch this week because it was important not to get overexcited, until the next MAJOR trend is established.

A breakout to fresh highs is still in play despite today’s pullback and there are a number of bullish signs I have talked about throughout the week developing. The action in the Financial and small-caps warrants a lengthy discussion over the weekend, but for now, I won’t bore you on the details.

The Dow is down 152 points to 21,302 while the S&P 500 is declining 20 points to 2,420. The Nasdaq is lower by 96 points to 6,137 and the Russell 2000 is sinking 13 points to 1,412.

I will be watching the rest of the second half action and building my Watch List for bullish and bearish trades. I literally have nearly 10 each bullish and bearish trades on deck that are close to triggering. I have covered a number of possible setups over the past few weeks and we just need to be a little more patient. In the meantime, let’s go check on our current trades.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 38-15 (72%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.

Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send a Trade Alert outside of these time frames.


Amicus Therapeutics (FOLD, $9.92, up $0.16)

FOLD July 10 calls (FOLD170721C00010000, $0.50, flat)

Entry Price: $0.70 (6/22/2017)
Exit Target: $1.40
Return: -29%
Stop Target: None

Action: Resistance is at $10-$10.25. Support is at $9.50-$9.25.


TherapeuticsMD (TXMD, $5.51, down $0.21)

TXMD August 7.50 calls (TXMD170818C00007500, $0.45, flat)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -10%
Stop Target: None

Action: Support is at $5.50. Near-term resistance is at $5.75-$6.


iPath S&P 500 VIX Futures (VXX, 13.04, up 0.71)

VXX August 14 calls (VXX170818C00014000, $0.90, down $0.20)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -25%
Stop Target: None

Action: Fresh resistance is at 13-13.25. Rising support is at 12.75-12.50.