0I47 trade ideas
Nice breakout move on CostcoAfter a long consolidation move towards the downside, this one finally broke out to a directional upside above the major moving averages (good to see).
COST setting up for a 30pt moveC&H on daily and an IHS in the handle breaking out. Measured move of ~$30
COST Daily Bullish bat patternIt's been a while since I posted COST idea last time as it didn't really give any great daily set-up.
In terms of this daily bat, the pivot isn't the perfect one as it didn't make new high afterwards, so a nice reversal sign near 178 is necessary for this trade!
I like to turn to retail consumers sector when it comes to market fluctuation, it won't hurt as much when the market pulls back and it can follow the market's rally.
Let's see how it goes!
COST at top of trend channel COST Is trading at the top end of a channel which has developed over recent weeks. Although it's not apparent long term on this chart (no Trading View stock data on a monthly level long term?), it's also trending at the top of a long term channel.
The wave chart appears to have completed a correction at about 183.00 , and is currently at the top side of the first rise. I expect an imminent correction back to the 187.00 level (approx), before a rise to 197.00 area.
$COST Head and shoulders setting up?$COST on the intra day charts is setting up what appears to be a head and shoulders pattern. The measured move would take price back to short term support. My stop loss for the short will be the 190 breakout level. Will be watching for nasdaq weakness in the days to come to initiate the trade. Thanks for viewing and enjoy!
Costco: Another Recent Breakout Long Entry - Up 13% in 16 DaysThis stock chart shows a breakout above the Blue Indicator Resistance line.
In my book this is a breakout and I went long on November 24, 2017.
Position is profitable, because I already sold 1/2 of it, and my stop is above entry.
This means it is virtually impossible for me to loose money on this trade.
COST potential weekly reversal?Based on the past weekly pattern, COST maybe due to for a pull back after earnings this Thurs. I am looking for a either a reversal for a push above the old high and reverse around 191, or just a fail after the earnings announcement. Anyway, it would be interesting to watch. But if the stock stays above the 188 to 191 zone, I would back off.
October 5 Earnings: Costco- Will eCommerce Ware Off Competition?Costco reports on Thursday, October 5th after the closing bell.
Heading into earnings, the company has a fairly straight forward R/R portfolio:
- Costco enjoys being a major retailer in the US with a wide array of products in multiple markets.
- The company's eCommerce capabilities are picking up steam and contributing meaningfully to revenue. eCommerce global expansion is aiding sales growth.
- Costco's membership club is expanding and drawing in customers in the US and globally.
- The overall market is a fierce competitive one, with giants like Wal-Mart $WMT and Target $TGT, among others, fighting for every consumer.
- Consumer spending, although picking up from highs, remains at a sluggish growth rate, hurting industry prospects.
I believe the pros will outweigh the cons for the expected quarter and Costco will beat expectations.
Starting Costco with a $178.00 Price Target for the post-earnings price action.
THE WEEK AHEAD: COST, BBRY, TEVA, MATEarnings
COST announces earnings on Thursday after market close. With a background implied volatility of 21%, it doesn't meet my basic earnings play sniff test, but naturally that can increase running into earnings, so it may be worth keeping an eye on.
Preliminarily, the Oct 20th 158/170 short strangle currently pays 2.21 at the mid with break evens around the 1 standard deviation line for both sides. The defined risk version of that play, a 155/158/170/173 iron condor, brings in 1.00, with break evens wide of the expected on both sides. (I looked at using the Oct 13th expiry to take maximum advantage of any vol contraction post-earnings, but strikes where I would want to set up my tent were less than ideal).
Non-Earnings
Post-earnings, BBRY implied volatility remains fairly high at 46.25%, placing it in the upper one quarter of the where it's been over the past 52 weeks. Given the size of the underlying, the only play that makes sense from a nondirectional standpoint is a Nov 17th 11 short straddle, which is paying 1.24 at the mid with break evens at 9.75 and 12.25.
The generic drug maker TEVA's implied is at 51.31%, which is around the middle of its range over the past 52. It's not quite where I'd like to see it, and the Nov 17th 15/20 short strangle is only paying .80 at the mid with break evens short of the 1 standard deviation line In contrast, the Nov 17th 17.5 short straddle is paying 2.46 with break evens wide of the expected on both sides, but the comparable iron fly -- a Nov 17th 12.5/17.5/17.5/22.5 only pays 2.20, short of the one-quarter of the width of the longs I like to get out of those. For those looking to strategically acquire shares or to just sell directional premium, the 30 delta Nov 10th 16 short put is paying .52 at the mid with a break even of 15.48.
Toy maker MAT has the right rank/implied metrics here, but with earnings a mere 17 days out, the preference is wait to put on a play shortly before earnings to take maximum advantage of vol contraction.
Exchange-Traded Funds
These are my bread and butter trades, but there's little bread and no butter here. The highest implied volatility exchange traded fund is EWZ at 31.43%, but it's in the lower one-fourth of where it's been over the past year. GDXJ follows with 29.93%; XOP, 25.96%; GDX, 23.25%; and OIH, 24.21%, all at the bottom end of their ranges and, in any event, below 35% implied generally.
VIX et al.
VIX finished Friday at sub-10 levels and its "little buddies" (VXX, UVXY, SVXY) continue to be cannibalized by contango. Sit on your hands for any VIX "Term Structure" trade (the first /VX future trading at >16 is in April) and wait for a VXST/VIX ratio pop to greater than 1.15 (Friday finish: 83.6) to put on plays in VXX, UVXY, and/or SVXY.
$COSTJust support and resistance
im naturally long but $COST has some hurdles it needs to clear before breaking out...
COST breaking through the 200 MACOST broke through the 200 MA and recent resistance line which is pretty bullish. Look tomorrow for confirmation of continuation.
