POSTED ON April 6, 2021 BY Matt Thalman
​
Unless you've been living under a rock, you know that the housing industry is booming. Inventory is low, and prices are high! Over asking is now a standard term and contingency waivers are the only way you win those bidding wars with other buyers. Oh, and not to mention, if you find a house for sale, you better see it the first day it is listed, or you can forget about ever getting a chance because the number of days on the market is essentially zero at this point.

So how can you invest in this market without having to deal with this headache of a situation and risk overpaying for an asset class that historically only goes up 2% year-over-year?

Enter the world of Exchange Traded Funds!

There are several Exchange Traded Funds that you can buy today that will give you access to the businesses that are not only performing well right now but are still drooling at the current prospects that lay in front of them. In particular, the home builders.

Let's be honest, in the current housing market, when you are offering over asking, waiving inspection and appraisal contingencies, losing a number of homes in bidding wars, doesn't building a new home sound very appealing? You get a brand-new product with no issues. You typically get some sort of warranty for a few years. You don't get into bidding wars. You don't have to watch Zillow like it's your job. You don't have to compromise because "this is just what's available."

The home builders know all of this and so do a lot of potential buyers, which is why for the foreseeable future, it...Continue Reading...

POSTED ON April 5, 2021 BY Aibek Burabayev

As Bitcoin matures, the chart structure becomes more readable over time. We can see how such a conventional indicator as a moving average perfectly supports the price. I added a 55-day (Fibonacci number) moving average (green), which at least three times this year kept the price in the bullish mode that started last October when the price crossed this line to the upside.
​
Another popular indicator RSI has perfectly detected the Bearish Divergence and pushed the price down last month. After that, it moved back above the crucial 50 level, which supported the current upward move.

POSTED ON April 1, 2021 BY Noah Kiedrowski
As the economy is on the fast track to reopening with a robust vaccine rollout, Disney (DIS) is set to benefit across the board. Disney’s Parks are set to reopen in stages starting in April, with its Disneyland and California Adventure theme parks slated for April 30th. The theme parks reopening will be a major catalyst for Disney as the company annualizes the COIVD-19 pandemic that shuttered all its properties worldwide. The company has been posting phenomenal streaming numbers that have negated the COVID-19 impact on its theme parks. This streaming-specific narrative will change as the theme park revenue comes back online and flows into the company’s earnings. Disney is a compelling reopening play now that the stock is double digits off its highs. Disney is a buy for long-term investors as its legacy business segments get back on track in the latter part of 2021 in conjunction with its wildly successful streaming initiatives.

Theme Parks and Streaming SynergiesDisney (DIS) expects its Disney+ streaming platform will have up to 260 million subscribers by 2040. The company continues to exceed all expectations in the streaming space accelerated by the stay-at-home COVID-19 environment. Despite the COVID-19 headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 impact on its theme parks to a durable and sustainable recurring revenue model. This streaming bright spot in conjunction with optimism of its park and resorts coming back online has been a perfect combination as of late, especially with the vaccine rollout picking up steam. Disney+ has racked up 94.9 million paid subscribers, Hulu has 39.4 million paid subscribers, and ESPN+ has 12.1 million paid subscribers. Collectively, Disney now has over 146 million paid streaming subscribers across its platforms. Disney+ has been wildly successful via unleashing all of its Marvel, Star Wars, Disney, and Pixar libraries in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between COVID-19 impacts against the success of its streaming initiatives, with the latter winning out.

POSTED ON March 31, 2021 BY Gary Tanashian

The Gold Miner correction was well earned, but it was not a bubble.
Even today there is some pablum out there talking about how if inflation is good for gold it is especially good for gold miners. I will simply repeat once again that if gold usually does not benefit fundamentally by cyclical inflation (i.e. inflation promoted for and currently working toward economic goals) the gold miners never do, unless they rise against their preferred fundamentals as they did during two separate phases in the last bull market, which were justly resolved with crashes.

Here are a couple charts we used in NFTRH 648 in a segment written to set the record straight. We have also used these charts – especially the first one – since the caution flags went up last summer, visually by the first chart and anecdotally by the usual suspects aggressively pumping the unwitting masses. Buffett buys a gold stock!… okay, well so much for that. Sentiment became off the charts over-bullish and now, as we prepare for the final act of the correction, it’s the opposite. That’s perfect.
​
HUI had far exceeded the Gold/SPX ratio and so it was very vulnerable from a macro fundamental perspective. Why on earth would players want to focus on miners digging a rock out of the ground that was starting to fail in a price ratio to the stock market? They wouldn’t, and since last summer they didn’t.

​POSTED ON March 29, 2021 BY Noah Kiedrowski
​
​Capturing over 100% of the option's premium income and closing trades prior to expiration is the ideal scenario for options trades. The manner in how one constructs this options trade is the key to these attributes. A diagonal spread leverages a minimal amount of capital, defines risk, and maximizes return on investment while enabling traders to capture greater than 100% of the option premium while accelerating the trade's closure before expiration. Diagonal spreads are ideal when engaging in options trading for many reasons, namely its risk mitigation properties. This type of trade is excellent to layer into a long-term successful overall options strategy which includes risk-defining trades, staggering expiration dates, trading across a wide array of uncorrelated tickers, maximizing the number of trades, appropriate position allocation, and always being an option seller to continuously bring premium income into the portfolio.
​
Using a combination of diagonal call spreads, diagonal put spreads, call spreads, put spreads, and iron condors over the past 11 months, a total of 248 options trades were placed and closed. During this timeframe, 243 trades were winning trades for a 98% option win rate with an average income per trade of $168, an average return on investment (ROI) per trade of 7.9%, and overall premium capture of 85%. An options-based portfolio can offer the optimal balance between risk and reward while providing a margin of downside and upside protection with high probability win rates. Risk management is essential when engaging in options trading to drive portfolio performance, and diagonal spreads are a key component to this overall strategy (Figures 1, 2, and 3).

POSTED ON March 26, 2021 BY MarketClub Team

Trends are a big part of what Wall Street is all about. And, just like fashion trends, they tend to repeat. Stocks that were once all the rage fade over time as new opportunities arise. But just as the market rises and falls in a cyclical pattern, so do good companies’ popularity.

The COVID vaccine availability and the return to business-as-usual means that solid companies are now excellent bargain buys.

For investors, one familiar name looks like it could be primed for outsized returns.
A Best-in-Breed Company and Consumer Favorite

Starbucks Corporation (SBUX) is a $128 billion niche restaurant chain company primarily known for its premium coffee selection. It’s the largest coffeehouse chain in the world, with over 30,000 locations in more than 70 counties.

The company reported a first-quarter earnings beat of $0.61 per share compared to the analysts’ estimate of $0.55 per share. Same-store sales in the U.S. fell 5% but came in higher than expected. Same-store sales in China turned positive for the first time since the COVID outbreak began. Total revenues came in slightly lower than expected at $6.75 billion compared to $6.93 billion. 
Continue Reading...

POSTED ON March 25, 2021 BY Chris Vermeulen

The markets really scared a lot of people in the last month. We’ve received lots of emails and comments from people wondering what’s happening in the markets and why the deeper downtrend didn’t prompt new trade triggers. Well, the quick answer is “this downtrend did prompt new BAN strategy trade triggers and this pullback is still quite mild compared to historical examples.” Allow me to explain my thinking.

The recent FOMC meeting, as well as the expiration of the futures contracts, usually prompts some broad market concerns. Many professional traders refuse to trade over the 7+ days near an FOMC meeting – the volatility levels are usually much higher, and this can throw some trading strategies into chaos. Our BAN Trader Pro strategy handles volatility quite well most of the time.
Recently, the BAN Trader Pro strategy initiated new trade triggers of subscribers and myself. Our members are engaged in the best-performing assets for the potential upside price rally that may take place over the next couple of months. Our strategies target opportunities based on proven quantitative technology – not emotions and use proven position management to maximize gains while reducing drawdowns.

Transportation Index Daily Chart Is Bullish

This leading index shows early strength in the market with an upside target of $14,668. That is a 3.5%-4.5% upside move ahead of us.

Recently, we’ve seen some substantial support in the Transportation Index that aligns with our BAN Trader Pro strategy. The rally in the Transportation Index, which usually leads the US economy by at least 2 to 4 months, suggests the markets are actively seeking out a support level/momentum base for another rally phase.
​
Using a Fibonacci Extension tool, we can clearly see the TRAN has another 3.5% to 4.5% to rally before reaching the 100% measured move target near $14,668. This level represents a full 100% rally phase equaling the initial rally from levels near $12,000, which started back in February 2021.

POSTED ON March 18, 2021 BY Noah Kiedrowski

Achieving an options win rate of 98% requires following a core set of 10 basic rules supplemented by some general guidance. Following these rules while deploying an array of option types (i.e., put spreads, call spreads, iron condors, and diagonal call/put spreads) across a diverse large-cap ticker list is the foundation of this success. Staggering expiration dates, managing winning trades, keeping trade allocation in balance with overall portfolio size, and trading in tickers that are liquid in the options market are other critical components to this success. Sticking to high probability outcomes via leveraging delta as a proxy, layering in some basic technical analysis, and maintaining appropriate portfolio structure is essential while ideally maintaining a 50% cash in addition to a hybrid long equity/options approach.

Options Trading Framework - 10 Essential Rules

A set of trading fundamentals must be followed to run an options-based portfolio over the long-term successfully. Specifically, position-sizing, sector diversity, maximizing the number of trade occurrences, and risk-defined strategies are some notable areas that traders need to heed for long-term successful options trading.

The following option trading fundamentals must be exercised in every trade. Violating any of these fundamental rules will jeopardize this strategy and possibly negate this approach's effectiveness on the whole. Below are 10 option trading rules that provide a basic framework of options trading to maintain discipline and systematic trading mechanics (Figure 1).
​
Figure 1 – 10 rules for long-term successful options trading as demonstrated throughout these performance metrics - Trade Notification Service
​
1. Trade across a wide array of uncorrelated tickers
2. Maximize sector diversity
3. Spread option contracts over various expiration dates
4. Sell options in high implied volatility environments
5. Manage winning trades
6. Use defined-risk trades
7. Maintains a ~50% cash level
8. Maximize the number of trades, so the probabilities play out to the expected outcomes
9. Place probability of success in your favor (delta)
10. Appropriate position sizing/trade allocation

Option Rules - Additions and Refinements

Continuously reflecting and refining the basic framework of options trading is encouraged to ensure continuous improvement and adjusting for lessons learned. The additional guidance will strengthen the initial set of rules to drive better outcomes over the long-term.

1. Avoid earnings-related events (these events can routinely cause strike prices to be heavily challenged and/or breached post earnings)
2. Avoid concurrent option trades on the same underlying ticker (if concurrent trades are placed, ensure an adequate gap between expiration dates and use different strikes)
3. Avoid strike widths wider than ~$5 (rolling trades becomes more feasible and will allow better opportunities for closing trades with narrow strike zones)
4. Use technical analysis to aid in trade selection such as RSI (Relative Strength Index) and Bollinger bands (this can help identify the trade type to execute, such as iron condors or directional trades such as put spreads or call spreads)

Potential Landmines and Anomalies

Following the 10 basic rules with the supplemental guidance cannot guarantee flawless results in the options trading space. One of the biggest threats to options trading is unforeseen stock price excursions, whether it be a black swan event or vertical moves up in the underlying share price that may jeopardize any directional options that are in play at the time of a drastic move. When these situations arise, rolling trades can be performed to reset the probability of success in your favor and allow more time for the price excursion to revert to its mean.

See This Week's Stock Pick
Experienced analyst carefully scours financial publications, balance sheets, press releases, charts, live events, and more to locate the most liquid, undervalued, and overlooked stocks.
Reveal The Stock of the Week

​Results

When compared to the broader S&P 500 index, the blended options, long equity, and cash portfolio has outperformed this index by a significant margin. In even the most bullish scenario post-pandemic lows where the markets erased all the declines via V-shaped recovery, this approach has outpaced the S&P 500 returns through 12MAR21 with substantially less risk 
​
Continue Reading...

POSTED ON March 16, 2021 BY MarketClub Team

As the economy picks up steam and the market continues its upward trajectory, it’s time for investors to consider adding more than just defensive or dividend-yielding stocks in their portfolios.
With business demand rising, the need for easy and convenient payment service options is also increasing. For one company, booming popularity with younger investors and an innovative business services solution creates a stock play that investors won’t want to pass up.

A Rising Star in the Banking Industry and Premier Growth Stock Opportunity
Square, Inc. (SQ) is a $114 billion financial software and fintech company best known for its merchant services and mobile payment applications.

The company’s trademark square-shaped mobile device attachment has revolutionized point-of-sale for small business operations around the globe.

The company reported a stellar fourth-quarter earnings beat of $0.32 per share compared to the analyst estimates of $0.24 per share. Revenues also soared 141% year-over-year to $3.16 billion. Management recently announced its plans to expand into other services, such as offering business loans and credit services.

One of the most surprising aspects of the company is its popularity with younger investors who buy shares through applications like Robinhood. As stimulus checks arrive, these investors could help propel the stock by purchasing more shares and giving it a bullish push higher.

Another catalyst for Square is its ever-expansive list of business services. It now offers entire point-of-sale systems, payroll services, and is currently seeking to provide business loans as well. Its appeal to small businesses could help Square expand its market and establish a longer-term growth trend.

Analysts appear to have mixed feelings regarding the stock. Redburn initiating coverage on SQ in March with a “sell” recommendation. However, Guggenheim upgraded the stock from “neutral” to “buy” issued a $288 per share price target.

The stock is trading at a heart-stopping multiple of 295 times earnings and comes with an equally astronomic long-term EPS growth rate estimate of about 50%. That gives the stock a PEG ratio of around 6 – generally not a strong positive sign.

However, investors should note that the company is growing fast and there is a large degree of flexibility in these estimates. Given that the forward P/E is closer to around 100, it suggests that the PEG ratio is most likely somewhere around 2.

The stock’s beta of 2.46 makes it an extremely volatile addition to any portfolio with large swings in value from week to week.

Only investors with a larger appetite for risk and who already have a well-diversified portfolio in place should consider Square for their portfolios.

​The Technical Layout
​​Square’s chart shows a clear pattern of peaks and troughs but follows a general path higher over time. The candlesticks show a classic hammer formation occurring in early March followed by a subsequent stock price rise.

This, along with the trend line of the 20-day SMA above the 50-day SMA, could indicate that stronger bullish momentum may carry the stock even higher.

The Bottom Line
Based on Square’s full-year EPS estimates, this stock should be fairly valued at around $290 per share – a gain of around 16% from its current trading price range.
For investors looking to spice up their portfolios with an aggressive, high-growth stock play, Square could deliver big rewards.
The above analysis of SQ was provided by Daniel Cross, a professional trader and financial writer.

See MarketClub’s Analysis of SQ...

Not a MarketClub member?

POSTED ON March 2021 BY Jeremy

After the markets traded relatively flat for most of February, a rally pushed the Dow Jones Industrial Index to an all-time high on February 24, 2021. The markets gave back the gains after the tech sector dragged down the market towards the latter part of the month.

However, investors are marching into March with optimism as another stimulus pushes forward, an alternative vaccine receives emergency authorization, and Treasury Secretary Janet Yellen encourages more government actions to stimulate the economy.

As we move into March, these five stocks are topping our list as strong-trending movers:

1. ETSY, Inc. (ETSY)
2. Host Hotels & Resorts, Inc. (HST)
3. Halliburton Company (HAL)
4. UnitedHealth Group Incorporated (UNH)​
5. The Boeing Company (BA)​

Etsy, Inc. (ETSY) Etsy, Inc is an online marketplace for handmade and vintage items in the U.S., Canada, Australia, France, and Germany. The company provides a number of seller services like inventory management, payment processing, and marketing. In February of 2021, Needham, Roth Capital, Goldman Sachs, and Canaccord Genuity all reiterated a “buy” rating for ETSY. (Click here for a FREE analysis of ETSY and be sure to notice the intermediate time frame).

MarketClub members following the long-term Trade Triangles would still be holding a long position established on April 20, 2020, at $63.24. Since that signal, ETSY is up more than 200%.

​
​



​CONTINUE READING “BEST STOCKS FOR MARCH 2021”→