27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
JPMorgan Chase & Co. (NYSE: JPM) and Goldman Sachs Group Inc (NYSE: GS) both report earnings this week.
In a recent report, Eagle Bay Capital's JC Parets analyzed each from a technical standpoint.
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JPMorgan
Looking at JPMorgan, Parets said it's only something he's bullish on if shares are "above the uptrend lines from 2011 & 2013." He added, "With a rising 200 week moving average this is not something we want to be short bigger picture, but no reason to be long if we are below these uptrend lines.”
With limited upside based on overhead supply from resistance this year, Parets has seen “little reason to force this long," adding that "on a relative basis, it is still in a 2-year downtrend and momentum has not confirmed recent highs.”
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So, when would Parets buy into JPMorgan? Only if the stock was above its highs from 2014, "with a target just below 67 based on the 161.8% Fibonacci retracement from the 2014 correction."
The stock closed at $61.70 per share last week.
Goldman Sachs
Parets isn't much more bullish on Goldman shares.
From a structural perspective, he said, the stock remains "in a nice uptrend," but is close to key resistance from its 2009 highs. "Momentum is doing its best to break this downtrend line but nothing so far," Parets added.
"With a flat 200-week moving average and 2 year downtrend in relative strength, the risk/reward has not and still does not favor the bulls.” If shares were in in the low $140 range, he said he'd be a "much better buyer."
The stock last traded at $195.64 a share.
"I would argue that a sustained breakout above the 2009 highs would be very bullish, but we have to wait for that to happen before even discussing its implications," Parets concluded.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.