Earnings season has officially begun, as Alcoa is regarded as the 'official' start of earnings season, and as usual, AA was the perennial failure we've all come to expect it to be. Earnings will pick up steam this week and really kick it into overdrive between now and the end of the month.
FUQI is pulling back towards the 50-day EMA, which I theorize will be new support. I took a starter position in FUQI today in the form of buying a February $20/$22.50 call spread, 1/1 for a net debit of $1.10. Translation: I bought 1 February $20 call at $2.10 for every 1 February $22.50 call I sold at $1, and the difference between what I bought ($2.10) and sold ($1) is $1.10. Since I paid more than I received, it's a debit of $1.10. I took this trade because I believe FUQI will hold support and rally. If it fails to hold support, I'll unwind the trade at what should be a small loss.
Everything on the watchlist besides ROST and ARO was down today. I still think ROST is in no-man's land, however. I'd love to see it fill that gap-down before it fills that gap-up, though. I think ARO's in worse shape than ROST because ARO today filled its gap-down. I think there's further downside in ARO. It's still stuck at resistance by the 50-day and 200-day EMAs.
CBI, CEU, EME, and SPAR all pulled back a bit today, coming closer to their breakout levels. I'm keeping an eye on all of these to make sure they hold those breakout levels.
RGR is struggling to break through resistance similar to ARO, and like ARO, I expect further downside there because it is strong resistance.
CRE is boring, but it's now formed a couple-week base at resistance (which may be morphing into support). I'm tempted to take a starter here and leave room to add should it fall further.
UTA got whacked pretty hard today. I considered a small starter of common stock today, but decided against it.
Position: Long FUQI
Disclaimer: This is not a recommendation and is presented for informational purposes only.
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