Stock Trading -or- ReconSWS's Bane

[gabe]

I've been strongly considering doing this as well. Any thoughts for stock candidates?

So far I'm just looking at the two in my portfolio that I have 100 shares of and aren't really moving anywhere: AT&T and Exxon. From my understanding it's best to choose a stock that has little chance of surprise movement through your strike price to sell a covered call on.

[splat15k]

So far I'm just looking at the two in my portfolio that I have 100 shares of and aren't really moving anywhere: AT&T and Exxon. From my understanding it's best to choose a stock that has little chance of surprise movement through your strike price to sell a covered call on.

That is my understanding as well and probably not entirely coincidentally, I was eyeing up AT&T for this but a $30 Oct30 call is paying only $15 per contract, which seems way too low to me. We should be looking for 2 to 3% monthly returns and that one checks in at roughly 0.5% ($15/$2847). It does have a nice dividend to help make up for that though!

[gabe]

That's my idea is that this is just supplimental to the dividend. I was looking at $30.50C 2 weeks out and they were in the $25-30 range. I think the shorter contracts will have a better monthly return than 1 month contracts. Plus you can re-set your strike price weekly or bi-monthly to keep your underlying safe.

I'm going to pick up 6 more shares of Apple to be able to sell calls on them. The contracts are pretty nice, like $300ish per.

[gabe]

One thing that might help in getting better premiums is to sell the calls at open at a higher limit price to try and catch a contract sale on volatility. IDK honestly, I need to reed up on the greeks and see how IV is affecting contract prices.

[splat15k]

That's my idea is that this is just supplimental to the dividend. I was looking at $30.50C 2 weeks out and they were in the $25-30 range. I think the shorter contracts will have a better monthly return than 1 month contracts. Plus you can re-set your strike price weekly or bi-monthly to keep your underlying safe.

I'm going to pick up 6 more shares of Apple to be able to sell calls on them. The contracts are pretty nice, like $300ish per.

Well shoot, I must be looking at the wrong values or something. Using TD Ameritrade, I am seeing that pay only $3 per contract (if we're still talking AT&T).

From what I can tell, high volatility will generate higher payouts; take a look at NKLA for example.

[gabe]

Okay yeah I'm seeing the same about $14 premium on $30c 10/30. I'd probably rather go shorter contract like 10/16 and a closer strike price like $29 for T as an underlying. There's definitely more risk that way.

In terms of volatility you're right, I think the IV of At&T is just so low that they don't pay. I'm really looking harder into Apple and maybe even pick up a few shares of Gap (GPS) stock to trade options on. SPCE might be another good underlying to sell calls on.

*edit* Holy crap I just checked the SPCE option chain and it's a cash cow. For $2k buy in on 100 shares you're looking and 125ish on 10/30 $23 calls. SPCE trades back and forth pretty hard so if you're willing to wait you can get shares down around $15-17 and hold them and do covered calls making back 10% per month. That's pretty sweet.

[splat15k]

Yeah, SPCE is intriguing for sure, as is NIO.

[the_matrix_guy]

My biggest winners since 2018 were AMD, TNDM, & DHR. But I liquidated all of the blue chips when the market wide CV dip hit in April and went all in on EMAN @ .55 I’ve more than tripled my money on the various catalysts since then. It’s currently trading at around $1.30 — but it’s a $5+ stock, IMO.

In terms of small caps, it’s hard to beat EMAN: Quick summary: Emagin is capitalizing heavily in the defense, health, & consumer VR/AR industries, with tier-one tech contracts (pending disclosure,) DoD contracts, & government backing (with recent grants totaling $39.1M) It just had a highly bullish Q2 ER showing 46% YoY growth, improving fundamentals, & confirming solid core-competencies. eMagin is the industry leader in microdisplay technology; with a best-in-class IP with significant differentiators (best picture quality and most energy efficient) & with brand new patents. The company is at an inflection point with a smallish float making it the best value proposition as per its current market cap, its manufacturing is 100% US based, it also has backlogged revenues for the next 12 mos. Technically, it's been uptrending since th emarket wide dip in April. it's been following the markets to a large extent, except that its had various catalysts (hence the spikes on the chart.) But I am expecting it to buck the trend next year even if there's a recession.

It has at least two signed agreements with tier one tech companies (pending announcement.) Definitely do your due diligence on this one. The CEO has already said that due to the significant backing by the Department of Defense, and the fact that they have significant liquidity, that they don't intent to dilute shareholders. The float is currently smallish at 67mn, and as I alluded, the fundamentals are quickly improving.

[gabe]

Matrix_guy....stick around bro, I like the cut of your jib. Bikes, gaming, paintball, stock trading, you're on top of it. That's a strong pick too, never looked into EMAN but might throw a few bucks at it. Solid fundamental analysis.

I've been slowly divesting myself of TSLA shares as the price has been going up, trimming 2 shares at a time to get it from 15% of my portfolio to about 10%. It was just dragging my whole average around to where my portfolio performance was just tied to that stock alone which did not feel good the last couple months since the split.

Re-invested some of that cash into some STOR (Store capital), a REIT for some dividend income. I'm definitely drilling down and repositioning back into dividend growth strategy along with about 20% of the portfolio in high quality growth companies to keep it tracking along with the S&P500 for growth track.

[the_matrix_guy]

Will do, And thanks. I do have too many hobbies & interests. I'm also into cars; off roading, spear fishing, firearms, etc, etc.

The chart for STOR looks pretty good. It looks like its also been uptrending with the markets since the market wide dip in April due to CV. And it just had a Golden Cross recently. 50 DMA keeps averaging up. I'd have to do some DD on it. Regarding TSLA, it's one of those stocks that I had on my watchlist since 2018 and I just kept watching go up & up. Frankly, I never thought it wouldve hit +300-400% from its 2018 levels, but either way, my portfolio was 80% AMD in 2018-2019.

And EMAN just had a presentation yesterday, again very bullish, not only are they poised to continue growing based on the existing contracts, but they are well poised to continue capitalizing market share. Emagin's OLED microdisplay was spotted in Nvidia's prototype AR/VR, this was during Nvidia's Display Week SID web conference in August:





But there are also a lot of tidbits and speculation regarding a possible Apple contract for either its upcoming AR/Vr or the Apple Glasses. The company has said that they're under NDA's so they can't disclose it until the companies release the products.But it's slowly getting the market recognition it deserves. It’s capitalizing heavily in the microdisplay & AR/VR industry.

* BULLISH MARKET-SHARE GROWTH WITH SIGNED CONTRACTS: Apart from the DoD contracts, the company has signed licensing agreements with at least two tier-1 tech companies in the AR/VR space and is currently in discussions to procure more contracts as per the CEO.

* INDUSTRY-LEADING PATENT PORTFOLIO WITH NEW PATENTS IN MICRODISPLAY: The differentiators are best-in-class in all categories: best picture quality and most power efficient by a wide margin. There are also pending news on the R&D front: The company is simply years ahead of the competition @ 7.5K nits going to 10K nits this year, 4K resolution TBA, and most power efficient technology which will be huge for the incoming wearable market as well as small form factor AR/VR solutions.

* HAD A BULLISH Q2 ER SHOWING 46% YOY GROWTH ALREADY

* BACKLOGGED REVENUES: At the end of Q2, EMAN's backlog grew to $14.5 million of which $13.2 million is expected to ship within the next twelve months. The backlog is up 24% as compared to the $11.7 million backlog at the beginning of the * UNDERVALUED: smallish float, currently undervalued as per the booked financials let alone the highly bullish core competencies.

* HUGE GOVERNMENT BACKING: $39M in recent grants, no prospects of dilution as per the CEO. The recent grants validate the importance of their technology for the DoD. And are meant to expand its manufacturing capabilities to deliver their patented dPd IP to their Defense Industry partners.

Existing defense contracts contributing to the company’s growth: These systems include: 1) Army Enhanced Night Vision Goggle, Binocular (ENVG-B) 2) Family of Weapons Sight: Sniper, 3) Laser Target Locating Module 4) Squad Binocular Night Vision Goggle 5) Common Laser Range Finder 6) Javelin Command Launch Unit 7) DELTA-I, and 8) eCOSI/eCOTI 9) Military aviation development programs such as Joint Strike Fighter (F-35) Helmet Mounted Display System , and 10) Apache Integrated Helmet and Display Sight System.

We have a $5 PT, but it’s on the conservative side, all things considered. The company is implementing an organic growth strategy. Aside from the existing deals pending disclosure and high probability of new contracts / increased market share: The CEO also stated in the Q2 ER and in one of the recent presentations that the company has significant liquidity and does not intend to dilute shareholders in the near term. The current float is smallish at 67mn. We are one major news drop / catalyst away from getting tute interest and smart money. Once that happens, everyone will be chasing. In fact, insiders are already buying calls which is a highly bullish sign. It obviously signals and confirms the highly bullish company outlook. And insider buying almost always precedes tute interest. That being said, their dPd technology is industry leading and scalable to all screen sizes not just microdisplays, so the $5 PT is conservative, in our opinion, all things considered.

I'm also on Stocktwits, UN; Turnberry.

[desertT1]

I now have a hair over 200 shares of ABR. They were in the upper 11’s a few weeks ago and I tried to sell 2 12.50 calls, but they never filled. I did it again last week when they were about 11.90. Those filled. Going one month out, .30 per contract. My quarterly div was .30 until they raised it to .31 last quarter so it’s like getting a doc payment every month if I can get the right setup. I don’t expect it to happen every month, but still.

I’m buying MAC with cash I put in and get from selling calls. That’s a 4-bagger if it gets back to the 52-week high, but also the div was .55 and they cut it to .15 per quarter when Covid hit. If they go back up (they should, all of their properties are back open) then my buying in the 7’s will get me in the 25-30% yield range for those shares I’m getting now.

[the_matrix_guy]

gabe EMAN finished the week strong. Look at that beautiful chart. It's been a case study on Fib charting since April. It's also showing bullish accumulation and following Wycoff.

[gabe]

I know, I have been watching hard since the 1.30 level trying to get in there but no chance. Beautiful week for them.

I've been bullish Intel and despite having a good earnings call they are getting hammered. Not too happy about things end of this week.

[the_matrix_guy]

Dude, gabe, I wish you would've talked to me about Intel earlier. I've been playing the Intel & AMD CPU duopoly for over a decade now. I always buy the fear and sell the greed when it comes to these two companies. Obviously, I am more bullish on AMD currently, they're gaining massive market share on both the consumer front as well as the enterprise side-of-things. That being said, I don't believe the Intel bear thesis that Intel is bankrupt-bound, for one sec. Yes, they are behind AMD by at least 1-2 years, but their single core architecture is still better. They just need one breakthrough in multi core efficiencies to get back in the game. Look, things always look extremely bleak, people forget that AMD was trading for around $5 in 2010. And people were saying that the company was going bankrupt. Even 7-8 years later, the stock was trading for around $10. Intel reigned supreme, and AMD was dogshit. It wasn't until Q2 of 2018 that AMD broke-out, (and that's when I went all in at $14.) I have been watching Intel for a year, I traded options earlier this year, but now I am watching for an entry point around 30. So yes, i am short term bearish on it but LT bullish. Funny thing, I was just talking to my buddy about Intel yesterday before it dipped.

Edit: I almost forgot, EMAN's uptrend is textbook, there's still alot of upside left. Currently, Stochastics are looking toppy, I do expect a small dip before Q3 earnings, in case you're looking for an entry point. But this company has a very bullish pipeline, lots of pending news on several fronts, and it is getting greater market recognition, you can confirm this with accumulation / distribution (Wycoff) analytics. Kopin (KOPN) is it's closest industry peer, and it already announced its Q3 ER date for Nov the 3rd, which is just a little bit over a week from now -- their IP is not nearly as good as EMAN's, and they don't have nearly as good core-competencies like the DoD backing, (as many or as lucrative) defense contracts, tier one tech contracts -- but nevertheless, they still reported 50% YoY growth last quarter. I am bullish on the whole microdisplay industry. It's one of those "a rising tide lifts all boats" growing industries.So KOPN is also worth keeping on your radar. It could also offer a glimpse into the market share growth for eMagin (EMAN).

it's also worth noting that EMAN is tied by the hip to Big Tech and the macros. It has been uptrending with Big Tech and the market indixes since the market-wide dip in April. Just last week, we went back over the 50 DMA again alongside Big Tech and the macros. It's one of the few micro caps with a textbook uptrend, following the markets, which bodes real well. So if you plan to jump in, always keep those macro charts handy cause we follow them closely: COMPQ, SPY, etc. Big Tech moves the whole market for better or for worse.And as I alluded, we're tied by the hip:

EMAN:



Nasdaq Index:



S&P 500:



And the NYSE Index:



DISCLAIMER: I am not a financial advisor. Opinions expressed are my own. Investment strategies vary and are fluid. Always do your own research and your own due diligence. Never make financial decisions based on comments on social media without researching the company yourself. And deciding what is the correct investment strategy for you. Always understand the inherent risk in trading securities.

[gabe]

Thanks for that insight. Yeah, I guess there is definitely downside on Intel in the short term but I'll just have to average down on it. Their earning power speaks for itself and it's only investor sentiment that is pushing the stock lower, not any fundamental issue with the company itself. Of course stocks trade on investor sentiment these days, not so much on the fundamentals.

Again, thanks for your analysis. I never learned to do the in depth chart reading or any analysis on that level so it's good to see some thought going into it. I'm a pretty lazy investor all things told and try to just buy companies with solid track records for earnings, trading at a discount for some reason, and with at least a 3% dividend yield so if all else goes poorly at least it's making me some return.