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The Inner Circle, Issue #415 - Frankenstalin: Soviet Union II
March 25, 2014
Frankenstalin: Soviet Union II
FROM: Frankenstalin: Soviet Union II:
Stocks rise until they meet resistance then reverse until they find support.
Anytime a quality company becomes available at depressed prices, (IMO) it should be bought.
MarketClub's Trade Triangle Technology algorithm currently ranks INTC Primary (monthly) Trend 'UP'.
INTC is now 3rd of the 10 highest dividend yielding stocks in the 'Dow Dogs' (3.58%) as of 3/21.
INTC is now 2nd of the 5 lowest priced stocks among the 'Dow Small Dogs'.
1/15: Day before earnings announced, an opportunity again presented itself to roll-up 'protective' puts at advantageous prices thereby locking in gains without sacrificing further upside potential (superior to using 'stops'). Did you take advantage?
1/16 After close, management announced expecting lower revenues going forward.
1/17 INTC gets hit hard at opening but closes well off the 25.25 low.
Week ending 3/21 INTC closed 25.17 (above the 50 sma & 200 sma on both the daily & weekly chart - favorable).
Protective puts doing their job.
In the event of a rally running out of steam, always be prepared to switch to 'premium collection mode' by selling front month (or no more than 2nd month out) ATM covered calls thereby morphing into a 'protected collar' position.
Key primary trend algo to watch: 12/3 low 23.40 (lowest low - last 3 mo).
Recent support pivot point: 3/14 low 24.40 (lowest low - last 3 wks).
Recent Resistance pivot: 3/13 high 25.00 (Broken 3/19) INTC currently searching for resistance.
Critical: 11/19 50 sma crossed above 200 sma on weekly chart = 'Golden Cross' (favorable).
Earnings: 5 yr avg EPS: 1.84. TTM EPS: 1.89. Current P/E: 13.32. Forward P/E: 13.74 (as of 3/21 close).
Est Avg Yr EPS: 1.85. Est Yr High EPS: 2.12. Est Yr Low EPS: 1.70 (per analysts).
Next earnings date: 4/15.
The combination of low price/high yield + support at the 50 & 200 sma = opportunity (IMO).
Whether you buy stock, protect with puts (& collect dividends) or buy calls (whatever suits your style), a limited risk/high reward position can be constructed. Each strategy has its own follow-up tactics, depending on how it plays out.
Cisco Systems (CSCO):
MarketClub's Trade Triangle Technology algorithm currently ranks CSCO Primary (monthly) Trend 'DOWN'.
Week ending 3/21 CSCO closed 21.64 (Yield: 3.51%).
CSCO ranks 4th of the 10 highest yielding DJ-30 'Dow Dogs'.
CSCO is now 1st of 5 lowest priced among the 'Dow Small Dogs'.
Key primary resistance algo to watch: 1/15 high 23.00 (highest high - last 3 mo).
Current resistance pivot 2/12 high 22.92.
Recent support pivot: 3/17 low 21.27. CSCO currently searching for resistance.
NOTE: Double bottom formed between 4/19 low 19.98 & 12/13 low 20.22 (lowest low - last 3 mos) key primary support algo.
CRITICAL: Break this and computer screens light up all over the world. Technically, CSCO should come under heavy pressure.
CSCO currently below both the 50 sma & the 200 sma on daily chart (unfavorable).
Weekly chart: CSCO currently below the 50 sma but above the 200 sma (mixed).
Earnings are rising, so far, (management lowered forward sales projections).
Earnings: 5 yr avg EPS: 1.36. TTM EPS: 1.52. Current P/E: 14.24. Forward P/E: 10.96 (as of 3/21).
Est Avg Yr EPS: 1.99. Est Yr High EPS: 2.06. Est Yr Low EPS: 1.96 (per analysts).
Next earnings date: 5/21/14.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!
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