One housekeeping item: I’m trimming one-fourth of my remaining $TWTR call options, locking in more profits. Will likely trim all of them and be out of the trade if it gets near $44 or $45 or so.
Onto the transcript from this week’s Live Q&A Chat. Join me live next week at 2pm EST at https://tradingwithcody.com/chat.
Howdy howdy hoe! Let’s pick some weeds and nurture our flowers.
Asketh me anything.
Q. Hi Cody, what’s your plan for the TWTR July options? Any trims or profit taking? Also, what metric do you use to take profits? Something like a 50% or 100%? I ask bc TWTR has major resistance around the 40 level but if it breaks thru, there could be some major upside…
A. Taking profits, trimming/selling, etc…are more art than science. I let each situation dictate how and when I trim and sell. as for TWTRC specifically, I see what you see — the resistance and pressure on the stock is already here, leaning on it below $40, whatever that resistance/pressure might be sourced from. And yes, if $TWTR can pop above $40, it’ll likely make a quick move to $44 or so, whereupon the momentum guys who will have plowed into it as it breaks above $40 would then get crushed on a move back towards $40…at least that’s my guess about the near-term. Holding my July TWTR calls for now.
Taking profits, trimming/selling, etc…are more art than science. I let each situation dictate how and when I trim. UPDATE: Trimming some more $TWTR call options today, Thursday, with it at $42.
Q. Your thoughts on the Lindsay earnings report please.
A.Nothing new at $LNN, as we have to continue to look out over the next five or ten or even twenty years and see the steady secular growth in irrigation and water management systems. Near-term, the demand will somewhat reflect agriculture crop prices. As the CEO put it today: Lindsay CEO Rick Parod said, “Lower commodity prices led to decreases in irrigation sales throughout North America during the primary selling season. Spring storms have created additional demand for replacement units, which increased our U.S. irrigation backlog at the end of the quarter. However, overall favorable growing conditions in North America continue to restrain crop prices. The lower crop prices, along with the reduction in the Sec. 179 tax benefits, create a headwind for irrigation equipment demand as compared to the previous year. Coupled with the addition of the conflicts in Ukraine and the Middle East, we have seen some slowing in international projects, as well…We anticipate a continuation of lower agricultural equipment demand in the near term, and have implemented appropriate expense controls. However, we will continue investment in critical growth initiatives and the execution of our capital allocation plan announced in early January 2014.”
Q. Cody, what kind of correction are you expecting??
A.Not sure I’m “expecting” a serious correction just yet. Let’s see how the markets play out this week for some tell on if there’s demand at these levels. Just wouldn’t be a big bull right now though.
Q. Hi, anything interesting come out of the meetings last week besides your speech which was the best?
A. Good question and yes. Best idea I heard was $LOCK and I’m doing homework on it right now. ICON was also an interesting concept, but probably not one for me. China economic discussion was interesting if not exactly helpful. Most of the stocks discussed weren’t good investing ideas other than as bets on the broader market cycles in my opinion, frankly. Worst idea was Health South…the entire presentation was about hoping that the government will continue to grant the company its profits and margins. #100%WELFARESTOCK
Q. Hi Cody, are you planning on selling the expiring $GSVC puts or are you going to let them convert into common short?
A. I’m actually considering “rolling over” my $GSVC puts. We made big profits on these when we bought them right as the $TWTR IPO hype ($GSVC owns some TWTR from before its IPO) had taken the stock to new highs. We’ve trimmed a lot along the way, and I’m likely to sell the remainder of the GSVC puts I have and replace them with some longer-dated puts at a slightly lower strike price. If the stock were to ever run back to $12 or so, I’d probably look to get aggressive on the puts again. Just a small position for now.
Q. Cody: Have you made your second tranche on $IXYS?
A. I bought a fair amount on the first tranche and didn’t get my second tranche bought before this pop, so I’m sitting tight with what I’ve got for now. Will add another tranche soon, I think.
Ask more questions, you will. Says Yoda.
Q. Saw your post on GOLD today. What did you mean by that post? Is gold in uptrend near term. Also eryba1 asked you the question regarding gold in the start of the chat today. Take on the move in gold?
Your take on the move in gold? Starting its upside to 1500 u thinkith?
A. Yes, the path of least resistance for gold is probably higher now. I am glad we’ve used our playbook approach of scaling into more gold when it was crushed. Steady as she goes, planning to hold most of my gold and silver coins and bullion to give to my daughter someday.
Q. When a stock like $IXYS and $AMBA get away from you per say and POP after only one tranche buy u willing to buy 10+% after ur first buy or wait / risk not getting more in before a further rise, or wait and hope for a pullback?
A. Depends on lots of factors, including the overall positioning/weightings in my portfolio. No set rule and nothing wrong with paying up for the second and third tranche if the upside potential is big enough. At this point, it does look like I’ll have to pay up for $IXYS on the second tranche in coming days.
Q. Sure many aspects, just wondering if at this point U want to wait for a pullback or JUST add soon, seeing that U spoke about drones at the conf, WSJ article on drones etc as its getting further attention.
A. Will add to $IXYS one way or another, up or down, in the next few days for my second tranche buy.
Q. Ambarella was mentioned over the weekend showing a part they make for the drowns, (it has there name on the part) very interesting.
A. Interesting term — “Drowns” makes me picture a drone with clown make up on it acting goofy in the sky. Ha. Yes, Amberella is everywhere small cameras are being put these days it seems.
Q. Did anyone ask about $BKS? What are your thoughts on the announced split into two companies? Are you planning to add to your position? More short or some puts?
A. Wrote this earlier today in my article. “I’m short $BKS because their revenue is declining, the company has too many fixed costs, and their Nook platform is already doomed/dead. Spinning off Nook doesn’t change my thesis overall, and indeed it gives us a new catalyst to the downside since there’s now NO growth in the model at all without Nook.”
Q. Sitting on Jan $27 INTC calls up over 200% – still lots of momentum for $INTC do you see any resistance coming?
A.I always suggest trimming some when you’ve got 200% gains in call options. I do think $INTC can get to $35 if the markets stay up here.
Q. Is there a play on the optics used for drones, or is that to much of a plug and play feature borrowed from other already established products?
A.No optics play on drones that I know of yet. Sorry.
Q. Also, why the heck is it so slow to type on this chat?
A. I just told someone, “Howdy hoe. How badly do we need to redo TWC? Scutify looks like $100MM, TWC looks like MySpace. Sigh.” I agree. I’ll be revamping TWC soon.
Comment: MySpace, LOL!
All right, thank you all. And when was the last time you told someone about all the value you’re getting out of TradingWithCody.com? Well, do it right now. No, I’m serious. Go email someone about how great TradingWithCody.com is and tell them I’ll give them a free month if they mention you. Thanks!