Mid-Market Update for 8/2/2017

3D Systems Earnings in Focus/ Trade Alert (VXX)

12:10pm (EST)

One of my favorite trading stocks, 3D Systems (DDD) is announcing earnings after today’s closing bell. Analysts are expecting a profit of $0.12 a share on revenue of roughly $162.5 million.

The company missed expectations by 5 cents last quarter following three-straight quarterly earnings beats of 2, 5, and 6 cents, respectively.

There are 16 analysts that cover the company with 10 Hold ratings with one Strong Buy and Buy rating. Additionally, there are two Underperform and Sell ratings on shares of DDD.

The high estimate has the company earning 13 cents a share while the low estimate is at 9 cents. This could equate to a penny beat or a 3-cent headline miss. There are reports 3D Systems had another challenging quarter with increased competition coming from HP’s (HPQ) Jet Fusion printer.

The chart is looking bearish with a downward sloping 50-day moving average and shares currently holding support at $17-$16.50 and the 200-day moving average. In early May, shares fell from $16.60 to a low of $14.81 on the earnings miss before closing at $16.08. However, shares went parabolic afterwards over an 9-session stretch to reach an intraday high of $23.70 by the middle of May.

3D Systems affirmed its 2017 earnings outlook of $0.51-$0.55 a share versus forecasts for $0.53 cents a share when they last reported. Revenue outlook was forecast at $643-$684 million for 2017 compared to expectations for just under $660 million. This seems a tad aggressive given the recent outlook and competition in the space.

There are weekly and monthly options available to trade and I chose the regular August 16 calls to play a possible drop towards $15-$14.

As far as the market, the Apple (APPL) effect wore off quickly after the open as the major averages, excluding the blue-chips, gave back their gains within 30 minutes of trading. Heading into the second half of trading, the Dow is up 39 points to 22,003 while the S&P 500 is slipping 5 points to 2,471. The Nasdaq is down by 26 points to 6,336 and the Russell 2000 is off 16 points to 1,410.

I have updated our DDD position along with a Trade Alert for VXX.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 42-16 (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.


3D Systems (DDD, $16.95, down $0.13)

August 16 puts (DDD170818P00016000, $0.55, up $0.02)

Entry Price: $0.55 (8/2/2017)
Exit Target: $1.10 (Limit Order on half)
Return: 0%
Stop Target: None

Action: Set a Limit Order at $1.10 to close half the trade. There is no Stop Target.

I’m looking for shares to make a backtest to $15-$14 on a revenue miss and lowered guidance.


Alcoa (AA, $37.18, up $0.80)

AA August 39 calls (AA170818C00039000, $0.30, up $0.05)

Entry Price: $0.55 (7/25/2017)
Exit Target: $1.10
Return: -45%
Stop Target: None

Action: Resistance is at $36.50-$37. Support is at $36-$35.75.


Wendy’s (WEN, $15.29, down $0.12)

WEN August 16 calls (WEN170818C00016000, $0.25, flat)

Entry Price: $0.45 (7/12/2017)
Exit Target: $0.90
Return: -44%
Stop Target: None

Action: Support is at $15.25-$15. Resistance is at $15.50-$15.75.


TherapeuticsMD (TXMD, $5.33, down $0.11)

TXMD August 7.50 calls (TXMD170818C00007500, $0.20, flat)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -60%
Stop Target: None

Action: Support is at $5.25-$5. Resistance is at $5.50-$5.75.


iPath S&P 500 VIX Futures (VXX, 11.23, up 0.18)

VXX August 14 calls (VXX170818C00014000, $0.14, up $0.03)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -92%
Stop Target: 10 cents (Stop Limit)

Action: The Stop Limit of 10 cents has triggered today. This was an insurance trade but one that still stings. Like blackjack, insurance can sometimes help but in this case it didn’t as volatility has remained near historic lows.