There were no distribution days in the Nasdaq Composite nor the S&P 500 this week. This tells me the big institutions are sticking with their positions. The Nasdaq is a little short-term extended but the S&P 500 looks like it’s ready to break out of a mini cup with handle. What we could see is this continued sector rotation, meaning some of the extended Nasdaq leaders could digest their recent gains while money flows into other sectors. My best advice is to stay focused on the leaders because the bigger gains are made in the leading growth stocks over the long term. Also, keep in mind this is the week of regular cycle Options Expiration (the third Friday of every month), which tends to lean towards the upside during uptrends, but the week after OpEx tends to see profit taking. If the Nasdaq and some of the leaders continue to see strength this week, I will be looking to lock in some profits into the strength and have some cash available for any pullback. As always, know your timeframe and make decisions based on your own objectives. Thank you and see you Monday at 7PM EST for the next Stock Screening Webinar!
Link to Mike Webster’s Weekend Update: https://www.investors.com/market-trend/stock-market-update-the-raging-bull-rides-on/
Unusual Option Activity:
7/10/20 Lam Research (LRCX) buyers of 3000 July $350 calls up to $4.85 to open
7/10/20 DataDog (DDOG) buyers active in November $110 calls again near $11 with 890X trading
7/10/20 Chegg (CHGG) seeing another 1000 Aug $65 puts bought, likely hedging, while upside Oct $90 calls w/ buyers again too
7/10/20 Chegg (CHGG) August $85 calls with buyers here into the highs for $3.90 to $4
7/10/20 STAAR Surgical (STAA) with 550 August $55 puts sold to open for $3 today
7/10/20 Netflix (NFLX) August $540 calls trading 2000X for over $5M in opening 30 minutes, buyers $25.30 to $25.40
7/9/20 Google (GOOGL) buyer 150 November $1650 calls $61.35 to $63.85
7/9/20 Zscaler (ZS) strong name w/ upgrade, Nov $130 calls 280X and Feb $165 calls 200X w/ buys
7/9/20 CrowdStrike (CRWD) buyer 200 Jan 2022 $140 calls today $22.55
7/9/20 DataDog (DDOG) seeing 540 Nov $110 calls w/ buyers
7/9/20 Zillow (Z) large stock replacement opens 8,250 January 2022 $80 calls for $13.50
Topics covered:
1) 0:00 Announcements
2) 1:00 Market Commentary – The 2 major analogies to strong markets: Liquidity and Setups, The seasonal trend of the week of OpEx, Staying humble, 11AM EST flush into the European close
3) 10:55 Index Review – Nasdaq Composite and S&P 500
4) 18:00 Stock Review – Mega Cap Focus List: AMZN, MSFT, NFLX, ADBE, FB,
5) 22:00 Stock Review – Software Focus List: COUP, AYX, VEEV, OKTA, DDOG, CRWD, FSLY, TWLO, NOW, ZS, ZM
6) 28:20 Stock Review – Artificial Intelligence Focus List: SDGR, BTAI, ICAD, DT
7) 30:55 Stock Review – Biotech/Medical Products: SGEN, VRTX, DXCM, STAA, ADVM
8) 33:30 Stock Review – Others: NVDA, Z, CHGG, TSLA, SHOP, BYND
9) 36:00 Stock Review – General Comments: NLTX, CRNC, EVER, IDYA, STMP, CTXS, KLAC
10) 38:20 Current Setups – VRTX, Z
11) 38:50 Conclusion/Summary