Last week was a wild ride with some of the most destructive action I have ever seen in price after many earnings reports. Then when the majority was bearish and many people were short waiting for the unraveling of Spain with its high bond yields and Greece to leave the EU with its unsustainable debt load we had a strong reversal and rally. The overall market is in a wide up trend with the 50 day acting as support over the past few weeks in the $SPY. Big caps have held up better than small caps recently and I am looking to trade the best performers in the S&P 500 in both sales and earnings growth and price trend. The majority of the time if you find the best charts you will also find that they have the best fundamentals.
Luckily I was not married to my positions last week so I closed out my first facebook puts with a profit before their earnings and I also closed out my Price Line puts before Expedia earnings. The next morning I bought Price Line call options when the stock was at $660 after the explosive strength it showed after Expedia earnings, I also bought Google call options when it held the $620 level with strength I also reopened my facebook puts but was stopped out. However my PCLN and GOOG in the money call options made Friday one of my best days of the year.
IF this reversal holds, and IF the EU does not scare traders and investors this week, we should see a nice run up in my new picks as leaders in this market phase. They are $PCLN $GOOG & $EBAY, I love these three stocks. I like their chart action, their relative strength, their stories and their price support at the 5 day ema. I will trade the chart and stay long unless I am stopped out. It looks like we currently have the wind at our back with the EU committed to do whatever it takes to keep itself together and the U.S. playing it cool until after the presidential election. I am currently leveraged long PCLN and GOOG with in the money call options.