Dids/Pexels
This Week’s Trade Exits
As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. A couple of weeks ago, we had a few options get assigned at expiration (on April 19th), and we didn’t fully exit the last of those positions until last Monday. These are the trades I exited since our last Exits post on Monday:
Stocks or Exchange Traded Products
Coinbase (COIN 0.00%↑). Bought at $217.61 on 4/19/2024; stopped out at $199.20 on 5/1/2024. Loss: 8.4%.
Options trades
Call spread on Coinbase (COIN 0.00%↑). Entered at a net debit of $0.60 on 4/30/2024; exited at a net credit of $0.10 on 5/3/2024. Loss: 83%.
Call spread on Alibaba (BABA 1.32%↑). Entered at a net debit of $2.25 on 2/8/2024; exited at a net credit of $4.50 on 5/3/2024. Profit: 100%.
Comments
Coinbase (COIN 0.00%↑) crushed its earnings estimate this week—the estimate was for $1.18 per share, and COIN earned $4.40 per share. Nevertheless, the stock was down slightly on the week, likely due to concerns about the recent pullback in Bitcoin.
A New Approach To Post-Earnings Trades
In the past, I’ve placed post-earnings trades in situations like this, where a stock is down despite solid earnings (also in some cases where there was an earnings miss but I was still bullish on the stock. One difference I’m doing now is waiting for some price consolidation before placing post-earnings trades. Specifically, I set an alert on Chartmill for when the Setup Rating on the stock hits 7 (out of 10), while the overall Technical Rating is at least a 6. That increases the chance we’re not catching a falling knife. Then we can jump in and place a longer-term bullish trade. I plan to do that with COIN, as I am still bullish on it.
Still Bullish On China
The Alibaba (BABA 1.32%↑) call spread was one of the bullish trades on China we placed earlier this year.
I’m still bullish on China and may be placing another trade on a Chinese stock in the near future.