Results Week Ending 6/26/20
My trading had another fantastic week, but it doesn’t feel so fantastic this week. Even though I locked in over 8K, my account does not reflect a very good trading week. Except for Thursday, this week was pretty much all down. Ending with Friday down 730 points.
This week I had a lot of Covered Calls working but I was only assigned on Peloton (PTON). It just so happens that PTON was more than half of my week’s activity, so that’s a good thing. Most readers know I look at myself as a trader and not an investor who likes to hold positions long term. If I get assigned, I’m happy! I had a 20 contract Covered Call with PTON, than I added another 10 contracts. I was assigned on all 30 contracts, that’s 3000 shares. At the moment I’m happy cashing in on these positions. I’m still holding a bunch of positions I didn’t get assigned on and I’ll try to get Calls sold on these shares this week. Here’s a list of stock positions I didn’t get assigned on:
500 Shares DKNG @$41.50
1000 Shares OXY @ $23.75
100 Shares AAPL @ $354.95
1000 Shares NTNX @ $23.65
300 Shares SWKS @ $130.00
100 Shares NVDA @ $375.50
This next commentary is for the traders who are into technical analyst. And if you’re a trader and not into technical analyst, you should be. The graphic below is the Daily Candlestick Chart of the DOW. It shows from Feb 1st to the close on Friday.
I’m a little worried about Monday. The DOW has been on a down trend for about 2 weeks now. If you look at the Daily Candlestick chart below, Friday’s candle (last on the right) came down and closed right on the 50 Day Moving Average (MA) (blue line). However, the 8 Day Moving Average (The “T” Line) (red line) did not cross to the south of the 50 Day MA…..Yet! Remember, we want the Red, 8 Day MA to be above the Blue, 50 Day MA. And we want both the red and blue lines above the white line which is the 200 Day MA. Just like it was in the beginning of Feb before any trouble started. Good Times!
Take a look at Feb 21st (1st red arrow). The candle came down to the 50 Day MA. 2 days later the 8 Day MA (red line) crossed to the south of the 50 Day MA (blue line) and that was the beginning of the big drop from COVID-19.
After a bit of a recovery, and the 8 Day MA was back above the 50 Day MA, on May 13th the candle came down and hit the 50 Day MA again (2nd red arrow). This time the candle bounced off the 50 Day MA and the recovery continued.
Well, As I said, this Friday’s candle in back down on the 50 Day MA (3rd arrow). Will Monday be an up day or a down day? Was the last 2 weeks profit taking, or the beginning of another COVID-19 big drop? If we have down days Monday and Tuesday of this week, the 8 Day MA will again cross to the south of the 50 Day MA. I do not think this will be good! Only time will tell.
Let’s take a look at this week’s trades.
Draftkings – Covered Call Without Assignment
6/19/20 – Sell to Open 5 DKNG 6/26/20 $42.00 C @ $1.80 (+$900)
6/26/20 – Expired 5 DKNG 6/26/20 $42.00 C
Profit +$900
Occidental Petroleum – Covered CallWithout Assignment
6/19/20 – Sell to Open 10 OXY 6/26/20 $24.00 C @ 20¢ (+$200)
6/26/20 – Expired 10 OXY 6/26/20 $24.00 C
Profit +$200
Apple – Covered Call Without Assignment
6/22/20 – Sell to Open 1 AAPL 6/26/20 $355.00 C @ $4.70 (+$470)
6/26/20 – Expired 1 AAPL 6/26/20 $255.00 C
Profit +$470
Peloton – Covered Call With Assignment
This is about the 7th or 8th week bringing in a nice premium with PTON. It’s the 3rd weaken a row where I brought in over $4000. PTON received a few upgrades this week. Let’s see if I can get another good week out of this stock.
6/22/20 – Buy 2000 Shares PTON @ $53.95
6/26/20 – Assigned 2000 Shares PTON @ $54.00
Profit +$100
6/23/20 – Sell to Open 20 PTON 6/26/20 $54.00 C @ $2.15 (+$4300)
6/26/20 – Expired 20 PTON 6/26/20 $54.00 C
Profit +$4300
Nutanix – Covered Call without Assignment
6/23/20 – Sell to Open 10 NTNX 6/26/20 $23.50 C @ 60¢ (+$600)
6/26/20 – Expired 10 NTNX 6/26/20 $23.50 C
Profit +$600
Skyworks Solutions – Covered Call without Assignment
6/23/20 – Sell to Open 3 SWKS 6/26/20 $130.00 C @ $1.50 (+$450)
6/26/20 – Expired 3 SWKS 6/26/20 $130.00 C
Profit +$450
Nvidia – Covered Call Without Assignment
6/23/20 – Sell to Open 1 NVDA 6/26/20 $377.50 C @ $6.10 (+$610)
6/26/20 – Expired 1 NVDA 6/26/20 $377.50 C
Profit +$610
Peloton – Covered Call With Assignment
This position started as a Naked Call. With the stock at $54 I sold the $58 Naked Call. I didn’t think I would get assigned but I placed a “Buy Stop” order at $57.50 in the case this very hot stock did get to my Strike Price. 2 days after I sold the Call my “Buy Stop” order was filled at $57.50. Putting this protective order on the Naked Call saved me from a big problem. The “Buy Stop” order strategy worked!
6/25/20 – Buy 1000 Shares PTON @ $57.50
6/26/20 – Assigned 1000 Shares PTON @ $58.00
Profit +$500
6/23/20 – Sell to Open 10 PTON 6/26/20 $58.00 C @ 75¢ (+$750)
6/26/20 – Expired 10 PTON 6/26/20 $58.00 C
Profit +$750
Total Weekly Gain +$8880
If you have any questions on the candlestick chart commentary please send me an email. I hope it’s clear we want the market up on Monday and have the red, 8 Day MA continue to be above the blue, 50 Day MA.
Have a great weekend!
Successful trading,
Steve
The Options Coach