A weekly chart below shows us that this is LNKDs third time testing all time IPO highs. I traded LNKD last October when it attempted to make new highs but a market correction took place and weighed in on the stock.

LNKD’s chart has reset back up along with strong fundamentals and a bullish up-trending market QQQ daily chart below.

When we zoom into a daily chart of LNKD we see it has already broken from nicely formed cup, yellow being the ideal buy price. The stock has since made fresh all time highs and is holding strongly above its 8 ema.

Based on the earnings season so far it seems that the risk is to the upside on good reports ie NFLX, GOOG. I will be looking to buy a MAR 125/130 or 130/135 call spread to reduce my cost basis but also cap my max potential gain. As with all earnings plays, they are extremely volatile and risky and you are ultimately taking a 50-50 shot.

We see GOOG has been trying to rebound since its earnings miss October 2012. Since then it formed what IBD likes to call a cup and handle, with a buy point around $741.50. GOOG reported favorable earnings Jan 23rd and zoomed passed that buy point and consolidated nicely. This 6 days consolidation led to a breakout Friday pushing GOOG to an all time high breakout.

Zooming in from the Daily picture we take a look at Jan 23 with a 9 day 15 minute chart. We can see GOOG holding those earnings gains by digesting through time and creating a ceiling around $760.95.

Friday morning the stock gaps up and triggers the $760.95 alert combined with higher than average volume. Using the Feb Weekly 765 calls options as a trading vehicle, your entry price was anywhere from .40-.90/contract. Below is the chart of the Feb 1 GOOG 765 Weekly call.

Low to high is somewhere around .40-11.60 or a 2900% return.

SPY

Nasdaq

McClellan

Banks remain strong, looking for breakout trades in both BAC and C as they remain above their 8 days despite the market corrections.

BAC

C

FB

Here is a good example of a trade that I was in that failed. Facebook was showing relative strength until the second release of restricted shares was up. A close below the 8 day told me momentum was leaving the stock and took me out of the trade.

Apple continues to show relative weakness to the market. I like the EMAs also as a gauge on the downside as they can act as resistance. Looking for a short term bounce/gapfill to let the EMAs catch up and provide a better risk/reward entry on an AAPL short

AAPL

If we look at a year to date chart, BAC is trading right under its 52 week highs of $10 that it made during its massive run earlier this year in March.

If we take a closer look at the run earlier this year, we see nice tight consolidation for about a month before an explosion in price and volume March 3rd.

I began to notice this similar consolidation, right near highs, with the moving averages acting as support beginning from September up until this week.

So I entered a tier 1 position on Monday in the BAC Dec 21 $10 calls for around .23/contract. BAC was tightening up and holding above its 8 day and I knew the move was soon.

Based on the previous multi-day rally and the possibility of the move not happening until next week, I opted for the Monthly options rather than the weeklies to allow for a swing trade while not getting eating alive from decaying premium.

Here is a daily chart after today’s price action. Notice the clean break of $10 and enormous volume on this breakout, exactly what you want to see.

Below is a chart of the BAC DEC 21 $10 Calls with only 16 days till expiration. On a perfect entry and exit (.18-.65), this option nets you a ~316% move! I am still long half of my position and sold the first contracts at .46 to take off risk of and ride out free calls. Lets see how this unfolds the rest of the week!

We are coming up to short term oversold oscillator readings

and could expect to see a bounce or pause over the next couple days

My position in LNKD was stopped out yesterday, as it cut below the moving averages and momentum left the stock. I broke my rule of letting a winner turn into a loser on this trade and am stuck holding left over, essentially worthless November 140 calls. Below are my entries and exits:

LinkedIn still behaves better than most tech stocks out there, however without the Nasdaq behind its sails it most likely will fall with the markets.

I will definitely keeps this on my watch when the markets act healthier and we get a follow through day.

I have a small position in (GroupOn) GRPN with some November 6 calls. Its a stock everyone hates, and has fallen straight from 30s never once looking back. It is working on a bottoming pattern, holding 4.50s and above its 8 EMA. Above 5.50s and it looks like it could catch shorts off guard for a squeeze. Earnings November 8th could be priced in and just might be the catalyst to start a move. Although it too faces a market correction and an anticipated slow earnings season.

KORS
This has proven itself 3 quarters now with impressive earnings and a chart that completely agrees. An explosive run from 24-50 and a nice consolidation since March. I love the volume increase to new highs, showing institutional demand. Best in breed in its group + a nearly perfect EPS rating = a recipe for success.

LNKD
Despite all the recent poor performing social media/web-type IPOs, (FB, YELP, GRPN, P, ZNGA). LNKD trades right underneath its all time highs. Its showing a healthy accumulating chart, impressive IBD fundamental composite score, and among its top 5 group leaders. Reference GOOG, QCOM to see what happens when IPO highs get taken out.

AAPL
Of course last but certainly not least AAPL. Already proving to be THE best in breed by rewarding shareholders for years now. Just past week making fresh all time highs, this too forms a nice consolidated weekly chart. Fundamentals also agree, with perfect EPS ratings and group leadership. Combined with a highly anticipated iPhone 5 release and rumors of an iPad mini to contribute a new revenue stream..this stock continues to defy investors’ definitions of “overbought” and “high P/E”

That being the case below Ive been creating a relative strength watch list to begin tip toeing into next week. Not all new follow through days work, but a new market rally has never started without one.

EXPE

SCXI

DLTR

ROST

MNST

ALXN

EQIX

QCOR

Daily Chart of GOOG

Overall GOOG has been an indicisive stock this year, but when we drill in more recently we see a series of lower highs. The last few week it was trading in range between 618-595, until last Wednesday it attempted to break out and regain the 50 day. This move has since failed and we find GOOG testing 595 once again which now represents its 200 day.

We notice by looking at volume that down days surpass up days in volume, showing signs of distribution. My plan here is to initiate a position if/when GOOG breaks below the 200 day (595-593) with stops set above the 20 day.

Track my real time trades below

This second chart below shows the value of my June 460 Put on the same exact time frame, 10 day 30 minute. You can see my buy in the red to the left of the horizontal line.

The tricky things with options is that unlike stocks, they are time sensitive instruments, meaning unless AAPL goes below 460 my option will expire worthless. That being the case, timing is EXTRA important when it comes to trading options, which is why I usually give myself a month even if I think the move is going to happen in the next few days.

So unless the stock is bleeding down fast, my option premium, (the price I paid) slowly starts eating away as the stock does a healthy consolidation before breaking lower. The other frustrating thing is, even though I technically shorted when AAPL was 567-568, I was still in a losing position when the price came back well below 560 on Monday.

If you correlate the two charts, Wednesday my puts were selling at 1.75 when AAPL was trading around 567, the option didn’t sell for 1.75 again, until yesterday around 2:30, when AAPL was trading at 545!! This creates unnecessary stress during a trade that is working for me, causing me to do what I did which was take a quick profit later that day.

Today the contract traded as high as 3.30, yielding an 88% gain from my entry price. So, take aways from this trade are:

Start tiering into trades for a couple of reason:

-If you are wrong on the initial lot, you only get stopped out on a portion of your position rather than your whole
position.
-In times of consolidation the option allows you to get in for cheaper prices, while the stock is still behaving as you expected and not violating your stop loss.

Secondly, be more patient on both entries and exits, tiering will help me stay for the larger move, and patience will get me better prices and put me in a position of strength during a trade.

Today it started showing its weakness breaking last weeks low of 562 combined with a lack of institutional buying. Coupled with many other leaders (PCLN, CMG, LULU) and indices rolling over, I still have pretty strong conviction that Apple sees more downside before the markets find their footing again.

520 is my profit target and price where I will start taking covers (or selling my puts).

Daily Chart below: