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The Inner Circle, Issue #417 - Transformation from 'What' to 'What'?
April 06, 2014
Transformation: From 'What' to 'What'?
FROM: Transformation: From 'What' to 'What'?
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' (3.41%) as of 4/4.
INTC is now 3rd 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 4/4 INTC closed 26.16 (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: 2/5 low 23.50 (lowest low - last 3 mo).
Recent support pivot point: 3/17 low 24.49 (lowest low - last 3 wks).
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: 13.84. Forward P/E: 14.25.
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 'UP'.
Week ending 4/4 CSCO closed 22.71 (Yield: 3.29%).
CSCO ranks 7th of the 10 highest yielding DJ-30 'Dow Dogs'.
CSCO is now 1st of 5 lowest priced among the 'Dow Small Dogs'.
Key primary support algo to watch: 3/17 low 21.27 (lowest low - last 3 mo).
Recent support pivot: 3/17 low 21.27 (lowest low - last 3 wks). CSCO currently searching for resistance.
CSCO currently above the 50 sma but below the 200 sma on daily chart (mixed).
CSCO currently below the 50 sma but above the 200 sma on weekly chart (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: 14.94. Forward P/E: 11.60.
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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