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Pandora

Is time for Pandora bearish positions over? Bullish perspectiveThe technical analysis matches with the fundamental perspectives, suggesting a new bullish time ahead after two years of bearish trend. Immediately after rebounding from the 61.8 Fibo level (measurement taken from the big bullish move on a weekly trend) some news have suggested the interest of some Equity Funds of acquiring the danish company and, after that, other news have suggested the hiring of Rotschfield consultancy in order to help the company in case of a possible acquisition process. This has given the boost to the price, which is now showing in the 1W framework a clear bullish scenario under formation; important to mention that the short interest index shows now a value of just 5%, compared to the double digit value registered some until few weeks ago. The feeling is that the bearish strenght is becoming weaker and weaker. Medium-Long Term Overview In my analysis, the price is moving towards a next target of 516 DDK, which is the 50% retracement of the major uptrend move and at the same time is the 50 EMA in the Weekly. After a short pullback, my long term view is the reaching of a target price in the range between 629 DDK and 671 DDK, corresponding to the area of both the 38.2% retracement of the big uptrend move and the 50% retracement of the big bearish move from 2016
OMXCOP:PNDORALong
by FrancescoMerlettini
THE WEEK AHEAD: DIS, AKS, P, TSLA, TWTR, X, MU, DISHWith most of the earnings heavy hitters in the rear view mirror, there isn't much to trade this week of quality from an earnings announcement volatility contraction standpoint, with DIS being the standout name. DIS announces on Tuesday after market close with a 30-day implied volatility of 25%, which is in the upper half of its 52-week range. The May 18th 96/97 16 delta short strangle pays .97 with a 75% probably of profit, which isn't horrible, but I'd rather have a background implied above 50%. One underlying that I don't usually trade earnings that caught my eye, however, was DISH, with an implied of >50%, which is at the top end of its 52-week range. It announces earnings on Tuesday before market open. You can naturally play it for earnings-related vol contraction (the May 18th 20-delta 30.5/37.5 short strangle's paying .88), but the chart may suggest taking a directional shot instead. I'll set out several bullish assumption plays in a separate post that would take advantage of its "being on its butt-dom." On the slip side of the coin, there are several individual names that have that ~50% metric I'm looking for that have already announced and that may be worth nondirectional plays that are just as -- if not more productive -- than the Disney earnings play if set up in the June monthly. Here they are, ranked by their 30-day implied volatility percentages: AKS (65.5) (straddle), P (59.2) (straddle), TSLA (53.9) (strangle), TWTR (49.5) (strangle), X (48.6) (strangle), and MU (47) (strangle).* On the exchange-traded fund front, not much is attractive, having all fallen below 35% 30-day implied: XOP (29.3), EWZ (28.5), SMH (26.9), EWW (24.9), FXI (22.8), so I'm unlikely to consider putting on a play in one of those unless something substantially changes as the week evolves. Moreover, my tendency is to set those up in the monthlies nearest 45 days until expiration and June (40 days 'til) is starting to "fall out of that window," with July (75 days 'til) being too far out in time. * -- You can naturally consider going defined risk with some of these, using iron flies instead of naked short straddles; iron condors instead of short strangles.
NYSE:DIS
by NaughtyPines
2
Pandora (P) Rolling Stock ConsolidationI am not licensed or certified by any individual or institution to give financial advice. I am not a professional Stock trader. Pandora (P) is on a roll--literally. The horizontal Support and Resistance lines can be drawn in a couple different places depending on your risk tolerance or trading plan. The larger channel is a roll between $4.50 and $5.40. (green horizontal lines, or top most and bottom most if you can't see the color green very well) Upside: More money due to larger spread/channel. Downside: Not as consistent. It doesn't always hit the upper Resistance Line. Smaller Channel $4.65-$5.20 (orange two lines, or middle pair of lines) Upside: It is more consistent--predictable, reliable, and repeatable as I was taught to look for. Downside: You won't make as much money since it's a smaller spread/channel. However, to quote the man who first taught me how to trade Stocks, "You don't go broke making money." Yes, it's a smaller spread; but it's still a win and profit. I painted a dotted arrow showing what I think it could do over the next few days or weeks. If it stays true to its pattern for the past few weeks and months, it should reach support in less than a week. Of course, that is what it has done in the past and we'll have to wait and see what it will do in the future. If you have a Stock or Index you would like me to look at let me know. I can always use more practice. :) If there is a way I can make these clearer to you (candlestick vs. line chart, background color, line color, more thorough explanation, etc.) let me know and I will see if I am able to accommodate you. I am planning on entering this play if it reaches Support and bounces. Let me know if you do and how it turns out for you.
P
by AROD01
THE WEEK AHEAD: P, HLF, XOPP announces earnings on 2/21 after market close; HLF on 2/22 after market. Any vol contraction plays you choose to pull the trigger on should be put on shortly before the close before which earnings are announced, when the background implied volatility is likely to be at its highest. With background implied volatility over 100%, the obvious play in P is a post-earnings vol contraction play. Preliminarily, the March 16th 5 short straddle is paying 1.22/contract at the mid with break evens at 3.78 and 6.22, theta 2.14, delta -20. That being said, it's so low to the deck that I could also see going at the money short put, with the March 16th 5 shortie paying .49, giving you a break even of 4.51, which would be your cost basis in assigned shares, assuming it's in the money at expiry, and you don't roll out to reduce cost basis further. The HLF March 2nd 77.5/91 delta neutral short strangle pays 2.97 at the mid with break evens at 74.53 and 93.97, a theta of 16.23. The comparable defined risk iron condor -- the March 2nd 73.5/77.5/91/95 pays 1.46 at the door with a max loss of 2.54, break evens at 74.53 and 93.97, and theta of 6.24. As far as non-earnings/non-single name risk plays are concerned, the volatility appears to be highest in the petro sector at the moment -- in XOP, OIH, and XLE. Of these, the background implied in XOP is the highest, and the April 20th 31/37 delta neutral short strangle is paying 1.22 at the mid with break evens at 29.78 and 38.22, theta of 2.13. The corresponding defined risk play (the 28/31/37/40 iron condor) doesn't pay one-third the width of the wings, so isn't worthwhile. Naturally, you can consider the iron fly route, where the metrics are pretty good for the play: the April 16th 29/34/34/39 pays 2.73 with a max loss of 2.27, theta of 1.12, delta of -3.41. In the volatility product arena, the /VX term structure remains "goofy" with a flat aspect front to back with the highest priced trading in March trading at 17.78, the lowest in June at 17.23 relative to a VIX print at 19.46, and we're still technically in backwardation with the front month (March) trading above April. That's a fairly narrow range for eight months worth of expiries* to trade in with little to no meaningful contango to take advantage of at the moment. That'll naturally work itself out at some point ... .
P
by NaughtyPines
THE WEEK AHEAD: GE, CSX, PYPL EARNINGS; MBI, PEARNINGS GE announces earnings on 10/20 (Friday) before market open. With a background implied volatility in high 20's (28% as of Friday close), it isn't particularly high from a premium selling standpoint, but I could see this as a potential acquisition opportunity via a November 17th 22 short put (paying .32 at the mid), in spite of the fact that the company's being a decent dividend bearing play is waning. Alternatively, the November 17th 22 short straddle pays 1.37 at the mid. Going pure volatility contraction play closer in time doesn't pay all that much, with the October 27th 22 short straddle brining in short of 1.00 at the mid. CSX announces on Tuesday before market open. Background implied volatility's in the mid-30's which places it in the upper fourth percentile of where it's been over the past year. The October 27th 51/55 short strangle's paying 1.24 at the mid, with the comparable defined risk iron condor at 48/51/55/58 paying .92. PYPL, with a background implied around 30 goes on 10/19 (Thursday) after market close, with the Oct 27th 65.5/71.5 short strangle paying 1.55, and the delta neutral 62.5/65.5/71.5/74 iron condor in the same expiry paying .95. NON-EARNINGS MBI, with a background implied of 66 (at the very high end of its range), probably only makes sense as a short put/acquire/cover cycle trade, with the November 17th 6 short put paying .35 at the mid and the 7 paying .76. The former would yield a cost basis of 5.65 on assignment; the latter, 6.24. P has a background implied of 67 (mid-range over the past year), with the December 1st 7 short put paying .27 (cost basis of 6.73 if assigned) and the at-the-money 8 paying .66 (7.34 cost basis on assignment). VIX/VIX DERIVATIVE TRADES Currently, no term structure or contango drift trades are in the offing. The first VIX future trading at >16 is way out in May, and the VIX/VXST ratio finished Friday's session at around .84.
NYSE:GE
by NaughtyPines
2
THE WEEK AHEAD: PIVOT TO NON-HIGH VOLATILITY STRATEGIESWith this quarter's earnings season all but over and with VIX trundling along at sub-10 levels, there is a paucity of high implied volatility plays in the market for premium selling, so I'm looking at deploying something in either low volatility strategies (diagonals) or in directional plays that I've been eyeing. Screening for underlyings with greater than 70% implied volatility rank over the past 52 weeks, greater than 50% background implied volatility, and relatively high options liquidity yields a few names -- P, HTZ, and NBR, but it'll be tough to squeeze good premium out of these because they're all <$10 underlyings. I would be willing to get into exchange-traded funds if only there was one with >70% implied volatility rank and >35% implied volatility; there currently isn't. With the individual underlyings, a P 9 short straddle in the July 21st expiry yields 1.84 at the mid with BE's at 7.16 and 10.84 (put side, below expected move; call side, at expected move); a HTZ July 21st 10 short straddle yields 2.03 with BE's at 7.97 and 12.03 (both sides clear of the expected move); and the NBR July 21st 9 short straddle, 1.54, with BE's at the expected move on the put side and above it on the call (7.46/10.54). Alternatively, NBR is a petro play,* so I can see taking a bullish assumption on the underlying and short putting it, even though it won't pay all that much (the July 21st 8 put brings in .40 with a BE of 7.60). Directionally, I've got my eye on two sector exchange-traded funds: XLE and XRT. Out of all the sectors, energy and retail have been the most downtrodden, so this may be an opportunity to go long with comparatively "cheap" setups that have oodles of time to work out -- Poor Man's Covered Calls -- with long-dated back months several cycles out. I'll post setups on those separately; however, each time I look to pull the trigger on a bullish XLE setup, oil seems to trundle lower and XLE with it ... . * -- NBR is deepwater; if they're not in trouble now with oil sub-$50/bbl., they will be in trouble in short order if prices hang around here for long. Generally, BE for deepwater oil exploration and production is well above this year's $55/bbl. high, so I'm hesitant to take a bullish assumption on deep water anything. Frankly, I'd rather put my buying power to work on something like XOP, where I'm not exposed to single name risk in this area, given the fact that there are so many troubled companies in this sector.
AMEX:IWM
by NaughtyPines
THE WEEK AHEAD: VIX, P, AND EWZVIX With July VIX options at 51 days until expiry, it's time again for a monthly VIX iron fly: VIX July 21st 10/13/13/16 Iron Fly Metrics: Max Profit: 2.00 at the mid POP: <1% Max Loss/Buying Power Effect: 1.00 Break Evens: 11/15 Notes: This setup involves looking at the /VX futures monthly expiry nearest to 45 days until expiration. That is currently trading at 12.92, so that is where the body of your setup in VIX goes. On setup, the POP% is abysmal, but the trade operates on the assumption that (a) VIX spot will run up into the /VX futures price as expiry approaches; and (b) price will finish between 11 and 15. Look to manage at 25% max. Be patient. These often come in at the very least (and I mean very last) moment. P With high implied volatility rank and high implied volatility and earnings in the rear view mirror, this one's ripe ... . Undefined Risk/Neutral Assumption July 21st 9 short straddle POP%: 60% 2.22 at the mid Max Loss/Buying Power Effect: Undefined BE's: 6.78/11.22 (Outside the expected move) Defined Risk/Neutral Assumption July 21st 6/9/9/12 iron fly POP%: 53% Max Profit: 1.91 at the mid Max Loss/Buying Power Effect: 1.09 BE's: 7.09/10.91 (Between 1 SD and expected move on low side; slightly short of expected move on high side) Notes: Look to manage these at 25% max. EWZ The Brazilian exchange-traded fund still has some juice left in it after tumbling last week on political turmoil. Undefined Risk/Neutral Assumption July 21st 31.5/39.5 short strangle POP%: 67% Max Profit: 1.26 at the mid Max Loss/Buying Power Effect: Undefined BE's: 30.24/40.76 (Near the 1 SD for both sides) Undefined Risk/No Upside Risk July 21st 32/39/40 Jade Lizard POP%: 82% Max Profit: 1.08 at the mid Max Loss/Buying Power Effect: Undefined BE: 30.92 (Between 1 SD and expected move). Defined Risk/Neutral Assumption: July 21st 28/31.5/39/42.5 iron condor POP%: 62% Max Profit: .93 at the mid Max Loss/Buying Power Effect: 2.57 BE's: 30.57/39.93 (Lower near 1 SD; higher between expected move and 1 SD). Notes: Look to manage all of the EWZ setups at 50% max.
TVC:VIX
by NaughtyPines
THE WEEK AHEAD: FXE OR /E6, P, NVDA, AND MWith the French elections now in the rear-view mirror, the Euro is at 1.10-ish at Asian open, and I'm looking to watch and short /E6 or FXE after seeing how far the spot forex pair goes here. Typically, the currency doesn't move all that much in the Asian session, so I kind of want to see what the European market does with the news before committing to a short position, which is likely to be a straightforward short call vertical, although some tweaking to the strikes being used will be necessary now that it's at 1.10-ish. (See Post Below). Aside from that, we've got some quality earnings plays coming up this week, a few with the metrics that meet or almost meet my "smell test" (>70% implied volatility rank, >50% implied volatility). P (80/68) -- announces on Monday after market close, so look to put on a play before the NY market shutters. Due to the size of the underlying, only a short straddle or defined risk iron fly makes any sense here for a nondirectional play. NVDA (72/50) -- announces on Tuesday after market close. Short strangle or iron condor are the suggested plays with potential tweaks aimed toward limiting downside risk (e.g., Reverse Jade Lizard) so you don't get AMD'd if that's the way this cookie crumbles. M (85/45) -- announces on Thursday before market open. At $29/share, this one's a kind of "in-betweener" -- you can go short strangle/iron condor if it pays enough or agress with a short straddle/iron fly if you want the allure of more credit at the door and the option to take profit at a lower max profit percentage. Of course, it's brick and mortar retail, which as a sector has seen individual name mixed results over the past several earnings cycles (being generous here), so my tendency would be to keep setup POP% high as a trade off against bringing in more in credit to give you greater flexibility dealing with a broken setup post earnings than a short straddle or iron fly would. I'll post more concrete setups should I decide to dip my toe into one or more of these ... .
AMEX:FXE
by NaughtyPines