By Lawrence G. McMillan
New conditional recommendation: NYSE new 52-week highs vs. low
As noted above, the number of new 52-week highs has been outnumbering 52-week lows quite easily. But that may be beginning to change. On Nov. 10, there were slightly more new lows on NASDAQ. We are concerned with NYSE data for this indicator, though.
IF NYSE new 52-week lows numbers at least 100 issues
And on the same day,
IF NYSE new 52-week lows outnumber NYSE new 52-week highs
THEN buy 1 SPY Dec (3) at-the-money put
And sell 1 SPY Dec (3) put with a striking price 25 points lower.
If this sell signal is confirmed, it would be stopped out later, if NYSE new highs outnumber NYSE new lows for two consecutive days.
New conditional recommendation: CMS Energy
This is a repeat from last week. The other conditional recommendation from last week – DraftKings /zigman2/quotes/213120645/composite DKNG +0.78% – was not filled, and we are canceling that recommendation.
The put-call ratio buy signal in CMS Energy /zigman2/quotes/209852159/composite CMS +0.38% is still in effect, but we want further confirmation by the price of the underlying stock:
Conditional Call buy in CMS:
IF CMS closes above 61.50,
THEN buy 2 CMS Dec (17) 60 calls
CMS: 59.71
Follow-up action
All stops are mental closing stops unless otherwise noted.
Long 3 LDOS Nov (19) 100 calls: These calls were bought and then rolled, in line with a weighted put-call ratio buy signal for Leidos /zigman2/quotes/202902477/composite LDOS +1.21% . The put-call ratio has finally rolled over to a sell, so sell these calls if you can.
Long 3 PCAR Nov (19) 85 calls: These calls were bought and then rolled, in line with a weighted put-call ratio buy signal for Paccar /zigman2/quotes/207923670/composite PCAR +0.74% , which is still in effect. Continue to hold as long as the put-call ratio buy signal is in place. The “rolling” instruction remains the same: roll up to the Nov (19) 92.5 calls, but only if PCAR trades at 92.5 at any time.
Long 4 EVH Nov (19) 30 calls: The takeover talks are supposedly still going on here, but Evolent Health /zigman2/quotes/207127728/composite EVH -1.29% is weakening. Continue to hold.
Long 2 ADP Nov (19) 230 calls: The put-call ratio buy signal remains in effect here, and we rolled up when ADP /zigman2/quotes/207661132/composite ADP +2.05% traded at 230. Roll up again if ADP trades at 237.5 at any time. Roll to the Nov (19) 237.5 calls in that case.
Long 2 NKE Nov (19) 175 calls: We rolled up when Nike /zigman2/quotes/203439053/composite NKE +4.38% traded at 165 on Oct. 29 and rolled up again when it traded at 175 on Nov. 4. The put-call ratio has reached overbought extremes but has not yet rolled over to a sell signal, so continue to hold.
Long 4 CCJ Dec (17) 26 calls: Raise the closing stop to 24.50.
Long 2 SPY Nov (19) 456 calls: These were bought on the upside breakout to new highs (after reversing from a long put bear spread). Roll to 2 SPY Nov (26) at-the-money calls. Raise the closing stop to 461, basis SPY.
Long 2 CONE Nov (19) 80 calls: Hold without a stop, while these takeover rumors are circulating.
Long 2 SPY November (26) 457 calls: This is our “core” long position. Roll to 2 SPY Nov (26) at-the-money calls. Raise the closing stop to 461, basis SPY.
Long 2 AUPH Nov (19) 30 calls: We are holding without a stop while the takeover rumors play out.
Send questions to: lmcmillan@optionstrategist.com . Lawrence G. McMillan is president of McMillan Analysis, a registered investment and commodity trading advisor. McMillan may hold positions in securities recommended in this report, both personally and in client accounts. He is an experienced trader and money manager and is the author of the bestselling book “Options as a Strategic Investment.”
Disclaimer:
©McMillan Analysis Corporation is registered with the SEC as an investment advisor and with the CFTC as a commodity trading advisor. The information in this newsletter has been carefully compiled from sources believed to be reliable, but accuracy and completeness are not guaranteed. The officers or directors of McMillan Analysis Corporation, or accounts managed by such persons may have positions in the securities recommended in the advisory.
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