New all time highs, accommodating FED

Happy Saturday fellow traders! Welcome to our weekly digest. We had an interesting and profitable week on Wall Street as we navigated a news filled week culminating in the FED minutes on Friday morning. We ended last week on a positive note as both the $SPY and $QQQ showed signs of life after managing to reverse their respective downtrends on Thursday.

We became more involved on Friday as we anticipated a move higher towards the all time high in the indices and a strong rebound in the small caps $IWM. Monday and Tuesday we kept adding on any dips and managed to play the oversold bounce in the Chinese names very well. On Wednesday we exited most of our positions as the rally looked very extended. As a result we avoided the sharp decline from Thursday as much as possible, leaving just some call spreads on. After the initial reaction to the FED minutes we re-engaged the best performing tech stocks such as $AAPL, $FB, $AMZN, $AMD for a nice end to a profitable week. We hope that we managed to guide you as well as possible through this week.

For the next week, after the FED reinstated its wish for tapering but remained adamant that interest rate hikes will not occur this year, we remain cautiously bullish and have more risk on.With the $SPY and $QQQ closing the week at their highs, but not as extended as on Wednesday, we expect more continuation to the upside, especially in some tech names which are still well below their all time highs.

Please find below our best trades of the week and how we approached them:

$BABA chart

$BABA has been a big winner for our portfolio at the beginning of the week. We became involved in this name on Monday as it posted a hammer type candle and also managed to reverse as it reclaimed 155.50. We exited our position on Tuesday for a gain of almost 20 points. Similarly, we had a call on, which rendered a healthy profit, which we exited on Thursday as this rally proved to be just an oversold bounce for now.

$IWM chart

The small caps had a great week and we managed to profit from their rebound. We put on some calls for later in September from last week and we let them explode as day-by-day the small caps reclaimed important levels. On Thursday, we created a spread and will look to maximize the profits it the $IWM reach 230 in the coming weeks.

$FB chart

$FB was our biggest winner for this week as it managed to reclaim its moving averages. Later in the week, it managed to reclaim 370 and had a push all the way to 373. We have been long the stock and call options throughout this week and we have managed this position very well. The stock was not extended and therefore we had more confidence in allocating capital to this name.

$AMD chart

$AMD has been for sale since reaching 120+ after its earnings report. It dropped all the way to 102 and we re-engaged this name on Friday as it showed signs of life. We had a great day trade all the way to 111+ and we remain long this stock over the weekend.

$GOOGL chart

We recommended this stock on Monday morning as it looked set for a new all time high. It gave us a nice trade for 100+ points by Friday’s close. It is still the best acting tech stock out there, and most dips have been great buying opportunities.

$AMZN chart

After its reversal last Thursday we have been long this stock through call options and we added more last Friday. It gave us a nice trade all the way to 3350, as our call options had 40-50% gains. For next week it looks ready to reattempt to fill some of its earnings gap starting at 3368.

We hope you managed to follow some of our trades and had a profitable week. Always remember to wait for the correct set-up to present itself before committing to a new trade. Last week there was a lot of frustration as most set-ups failed, but having a plan and patience proved to be yet again a winning strategy. At Eclubtrading We Grow Together! Have a great weekend and thank you for following us!

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