Real Life Trading Spring Portfolio 2018: Second Edition
Hi there Real Life Traders, friends, family, fans, followers, investors and stock market nerds from around the world. How are you? I trust you are doing splendid and sensational!
So, it turns out May is in the building. I just got back from a pretty epic travel season. Since my last portfolio write up, I was gallivanting in Miami, Florida meeting with some incredible traders...
and then we popped down for the 4th annual Real Life Trading cruise to Jamaica and the Grand Caymans...
and then Ashley and I flew up to Montreal for a week and met many stunning traders, some of whom trade full time for a living.
The next visit I’ll make will be a few miles north of Nashville, TN to Indianapolis, Indiana to spend time with Brad Reed on May 14- May 19th.
After that I’ll be in Houston May 26-June 1st. And then June 10th - June 13th Ashley and I will be in San Diego, California followed by a quick stint in Los Angeles, California June 14th - June 16th.
The 3rd edition of this portfolio will hit sometime in June, so I’ll give you my travel dates again at that time. From here, let’s dive into the charts and review some of our prior analysis along with some future thoughts, projections and set ups!
- Baozun Inc. - Ticker: BZUN Analysis on May 6th, 2018
Earnings on BZUN are around the corner and everyone who is following this one will be holding their breath to see how they do and if they grow. Personally, I’m kind of hoping for a gap down into the $38 zone. That seems to me as a decent buying spot and semi strong support.
What has been occurring thus far is a nice little sideways channeling action that has been occurring after the solid retest gap, back on the prior earnings in early March. Let’s zoom into the hourly chart so you can really see that movement.
It would make a lot of sense to me if BZUN comes back down into the $43 - $41 area, that should be a decent buying zone.
If we zoom into the 4 hour chart you can see a nice support and curve from the 100 SMA.
On our last planned set up on BZUN I missed getting filled by pennies, but the overall analysis of “look to buy some pull backs and at least have a plan to be more bullish than bearish on this gorgeous trend and growth company”, was spot on.
Also, as you might have noticed, many traders had the May $35 put sale which they have already been able to buy to close for a decent gain. If you are still holding that one, cool. At this point it’s over $11 away from the stock, more than a 25% discount if you did actually get put shares. And now it’s below the 100 / 200 SMA on the daily chart. All in all, she looks good to creep higher. The trend appears to be in tact and unless that changes, #buythesalsa.
BZUN price from the first edition: Up $.37 (Flat)
2. Tencent Holdings Inc. - Ticker: TCEHY Analysis on May 6th, 2018
Alright, time to check into this behemoth of a company. In all honestly, not much has changed on TCEHY since we last looked at it. I mentioned in the last write up “now, I do think TCEHY is a better longer term play.”
It’s obvious to me that TCEHY was in a powerful uptrend and simply needs to rest and distribute for a while. However, the last plan to pick some shares up on TCEHY off of the 200 SMA played out perfectly. I mean, that trigger was 47.88 and the low of May 3rd was 47.88. ;-) Just saying.
Most traders are snagging this stock (for now) in 10-30 share increments. We realize it’s high! We realize it needs to chill out and chop around for a bit, but TCEHY is beginning to interact with it’s 200 SMA for the first time in a long time.
Continue being ‘paytient’ with this one. This company is truly massive, it’s already experienced a massive gain, but in my opinion, financially, there is zero chance this stock isn’t higher in the next 3-4 years. So building a position on it sounds prudent. The next level to possibly pick up a dozen or so shares could be 44.44.
TCEHY price from the first edition: Down $3.68 (6.9%)
3. Yum China - Ticker: YUMC Analysis on May 6th, 2018
I’m just going to come out the gate on this one. This does look like a head and shoulders to me.
The best part about head and shoulders is, they rarely sell off quite as hard and fierce as many traders want or expect them to. Sure, we could see YUMC pull back decently well, but I heavily doubt she goes to zero. The good news is, in the last article I mentioned “ My thoughts, the bullish trend and longer term buying opportunity should stay in tact as long as YUMC doesn’t gap down below $38.83 on earnings."
Well… she did exactly that.
So, at this juncture, their are multiple ways this bad boy could play out and their are numerous strategies and approaches one could have. I’ll just outline some and you could decide on which you like the best!
This just goes to show you, one could always have multiple plans of attack. The goal is often choose which one suits your time frame and knowledge the best. For example if you have never traded options, nor have you shorted a stock over the long term, then go with the bullish trade.
If you don’t like the bullish trade, then you could just wait it out. With as bullish as this market has been in general, I have a difficult time seeing YUMC just crashing lower, especially with the weekly trend on YUM still intact.
Personally, it makes sense to me that this one defies gravity. So, my personal plan is to go short term bullish (if she makes a higher high) and then try a bearish roll over once, max twice and then look for a bullish trade again if this one doesn’t break down.
YUMC price from the first edition: Down $3.31 (7.9%)
4. MOMO Inc. - Ticker: MOMO Analysis on May 6th, 2018
Hooray! I’m excited because MOMO pretty much made my April. That’s because I did get called away on the $35 covered call, placed all the way back in December of 2017.
What’s been fun about this stock is it’s bounced off of the 200 SMA on the daily chart a few times recently.
Secondly, what I really dig on MOMO is this pattern right here.
It seems as if some solid pressure and consolidation is occurring and she might be ready to spring forth. One could try tip-toeing into the break out with a 1/4R of risk, something similar to this. There are, of course, numerous ways to approach this one.
If this pattern does happen to break down, the 100 SMA on a weekly could once again become a decent support. However, this set up makes the most sense to me. Earnings are a couple of weeks away and if they come out good, we could see MOMO skyrocket into it’s previous resistance, which could easily be a 20%+ gain.
MOMO price from the first edition: Down $2.02 (5.4%)
5. APPLE Inc. - Ticker: AAPL Analysis on May 6th, 2018
At the present moment, this seems to be the only green in this portfolio. And we can thank Dr. all you can eat Buffett.
It was announced recently that Berkshire Hathaway scooped up a measly 75,000,000 additional shares on AAPL, which caused AAPL to gap up and out of a beautiful 2 day pennant pattern.
Speaking of Berkshire Hathaway, my 2 best buddies and trading partners Shaun and Matt checked off a bucket list item by taking a private charter flight to the Berkshire annual shareholder meeting. How exciting right?!
Thursday’s candle was a complete inside day candle. Which means the low and high of the day was completely inside the previous day’s high and low. And both Thursday and Wednesday’s candles had nice upper shadows and wicks, representing selling pressure. I mean, this was occurring at such a nice previous resistance. I did personally feel the stock would fill the gap before bouncing (which was worse case scenario of course) but reviewing the previous 2 earnings on AAPL, it is not a question of IF, simply when AAPL hit’s $200 and the trillion dollar mark. I’ve been calling for a $200 AAPL all year and here we sit, about 50% through the year and she’s getting closer and closer.
AAPL scored a new all time high on Friday of $184.25
With dividends just days away and 2 gorgeous retest gaps on AAPL, my thought is AAPL likely does something like this.
Meaning, the trend is unquestionably bullish, it’s the most profitable company in the world and with the announced $100,000,000,000 (yep, you read that correctly) buy back program, I just mathematically can’t see how AAPL doesn’t eventually trade higher from here.
As you’ll see on the above chat, a few traders are doing some covered calls up here. I think that’s a really good plan. AAPL is about to enter an ‘exuberance’ stage, where that’s what everyone talks about and discusses. Therefore, keep your eyes peeled on a dip buying opportunity and let this trend play out for you.
Congrats to the numerous Real Life Traders who had put sales, bull put spreads and the numerous other bullish to neutral position on AAPL over earnings as we all thought she would do…pretty much what she did. Nicely played.
AAPL price from the first edition: UP $16.05 (9.5%)
There you have it my good friends! I appreciate your time, thoughts and energy. It means a lot to me that you read all 1,700 words of this write up. I hope you found it useful and enriching! May will be an exceptional month for traders and I hope we continue to enrich and inspire others the world over! Thanks for all you do! Keep your eyes and inbox peeled for more free and enriching content coming your way this month!
Until next time, remember,
Love Life, Live Life and Trade it!
~ Jerremy Alexander Newsome
- Shaun and Matt’s biggest Fan