By Don Fanstone, Member, Kitchener/Waterloo User Group
Option Blog July 19, 2015:
VectorVest advises buying undervalued High VST stocks in a rising market.
VectorVest will help you make money if you follow VectorVest timing advice.
USA: Col. Grd Neutral, MTI .91 Up/Dn, C/Dn, VV: Buy with caution.
CAN: Col. Grd Neutral: MTI .80 Up/Dn, C/Dn VV: Buy with caution.
With the resolution of the Greek bailout, the MTI has moved up in both markets and is ahead of the 8 DMA. The primary wave in now up. All positive.
In reviewing the VectorVest portfolios, I bow to the success shown in Jake’s Patent Winners. This portfolio, started on November 1st, 2013, has experienced one very minor loss, and sports a gain of 117% to date, not counting dividends received. One does not need to reinvent the wheel, but go with a winner when picking good safe stocks and cutting losses by exiting when VST < 1.2. Whether you are seeking dividends with Capital Gains, or leveraging Capital by buying Call Options, this search is a proven winner.
Follow the search created by subscriber Jake Pattinson and you too can be a winner.
Sells for the Week of July 6th:
Can. Nat RR. (CNR): Earnings report on July 20, took the profit in hand.
Depomed (DEPO): Takeover offer, took the profit, did not wait for a higher offer.
Avigilon (AVO): At expiry, a loss
Brkfield Asst (BAM.A): At expiry, a loss.
Buys for the Week of July 6th:
Thompson Reuters (TRI) 10 Jan. 44 Calls @ $6.30
Starbucks (SBUX) 8 Jan. 50’s @ $7.00
Stocks to Follow/Buy (Jakes Patent Winners) Not all are optionable
USA: GILD, BRLI, CNC, NTES, ALK, SWKS, EW, SBUX, CVS, HELE
CA. BOS, VRX, ATD.B, DOL, MRU, CCL.B, PBH, GIL, RBA, CTC.A, EMP.A, GWO, L, GIB.A, TIH, TRI, LNR, ATU, EMA
With the market moving up, Bull Credit Spreads are timely.
DISCLAIMER: Options trading involves risk and is not suitable for everyone. The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. Options training is strongly recommended before placing any trades. VectorVest offers a basic options course online and occasional intermediate options workshops in Canada each year.
Don, appreciate your sharing your options plays. Hoping you might also share some of your options plays and prior trade setup considerations for earnings (e.g., when use straight call/put, straddle, strangle, etc.), as well as some example. I have a program that identifies seasonal/earnings opportunities and would like to start using options strategies to enhance my potential earnings. Thanks for sharing!
Hi Don. Look forward to your insights each week. If you get a chance could you email me at [email protected] or call me at 519-376-8066. Thx
Hi Don,
While options are not for me – I admit that I simply cannot get my head around them and have enough trouble picking stocks without having to choose promising price points and time frames
I did want to reiterate your strong belief in Jake’s PW and as a current example – If one needed a new stock to fill a vacancy in your portfolio on May 1 and you chose Jake’s search, you would have found BOS at the top of the list and if you bought it at the close that day, you would be up over 53% today and it would still be at the top of both Jake’s list and the VST leaderboard – I think it is the best and most prudent search in our Canadian database. I rest my case – for now
so Thank you Don and Jake !!
Don, have you also adapted Jake’s Patent to the U.S. market? If so, any parameters changes comparing to the Canadian one?
Unrelated as far as credit spreads idea are involved I would suggest to limit those to companies which do not report earnings during that month.
Hi Gil:
The only parameter I would change for using Jake’s Patent Winners in the US is volume. Currently, the stocks listed in the blog are with a volume of 100,000. I ran this with volumes of 250,000 and 500,00 and the only stock that dropped out was Helen of Troy. I have not investigated further to know if this was volume related or a change in another one of the criteria. Going forward, I will use a volume of 250,000.
Thanks for your suggestion about credit spreads, you are absolutely correct in checking on earnings release dates before doing a spread.
Don
Don
Barry:
Thanks for the comment, Jake deserves the credit, I am merely the cheerleader pointing the way.
Don
Michael:
I normally trade in a RIFF, and as such, the strangles, and spreads are not allowed.
If you have a program that identifies seasonal earnings opportunities, I suggest you follow VV market timing, when to BUY, and VV stock ratings. Buy undervalued stocks, Buy stocks with a RS of 1.35 or greater, and a VST > 1.2. As in Jake’s Prudent Winners, his search looks for stocks with a rising RT, important to catch stocks on the way up. With Call Options, it’s important to take profits when in hand. if you have a 25% profit, take it!
if You have a profit and the stock starts to fall, hold on to 1/2 of the profit if possible. Jake’s exit strategy of selling when VST <1.2 works best if you're holding the stock, with options, it's a matter of taking short term profits, they do add up!
Don