NEM

Last September, with Netflix shares in the $170s, down from a hysteria-driven blowoff to $305, I offered a commentary under the headline Netflix Plummets, and for Good Reason.  With the stock trading 40% off its highs at the time, I didn't see much value in it. I still don't -- and that's with NFLX currently hovering in the mid-$60s. Recall that the company was perceived as the hottest new idea in the business world just a year ago. Now it is just another dot-com has-been, trying to sell streaming movies at a time when big competitors like Amazon and Comcast have begun giving them away.  Netflix is headed to zero, isn't it obvious? Perhaps there'll be a lesson in it for all of the miserable dolts who still believe that Facebook shares offer good value.  From a technical standpoint, Netflix stock could fall to minus $46. Since we know that's impossible, I've settled on zero to be more realistic. Click here to sample Rick's Picks detailed trading 'touts' and the  chat room free for a week.

Shortable Hidden Pivot rally targets at, respectively, 65.00 and 65.18 correspond to those noted in today's tout for the Dow Industrial Average. Accordingly, I'll suggest buying four July 65 puts (or some multiple thereof) if and when the target is closely approached.  Since, in my estimation, odds of a downturn from somewhere near the target range is very high, we can dispense with a stop-loss for the time being.

We've been looking for a way in, and it could come soon if price action traces out a path similar to the one shown in the chart. Buy 400 shares on an 'X' signal, or four June 50 calls.  I'll establish a tracking position if at least two fills are reported in the chat room. _______ UPDATE (10:27 a.m. EDT): Newmont's dramatic, criminally rigged swoon afforded no easy opportunity to get long this morning, since the 45.22 low failed by 26 cents to reach a 44.96 Hidden Pivot where we would have been looking for the turn. The action is ostensibly bullish, but not sufficiently so that we should let down our guard.

Judging from the way Newmont plummeted through the 'p' support of the bearish pattern shown, more weakness to at least 51.21, its 'D' sibling, appears likely. This could represent an opportunity for us in the form of a potentially low-risk entry point for a long-term position.  Accordingly, if and when Newmont  gets within 7 cents of the target, look to buy four June 52.5 calls for the best price possible. _______ UPDATE:  Newmont is in rally mode right now, so we'll set the trade aside for the time being.

We hold a round lot versus an April 57.5 call shorted for 1.84. My apologies for hyping a call sale at 3.00 earlier, since it never happened.  Do nothing further for now.  We will pocket the $184 if NEM is trading 57.50 or lower come Friday, so it offers good downside protection as well as an expiration that is just days away.  If the stock is above 57.50 at that time, I may suggest simply letting it get called away.   With a cost basis reduced by earlier profit-taking to 41.22 per round lot held, that would yield a theoretical profit of $1800. We acquired the position just three weeks ago. _______ UPDATE: The stock went out at 57.77, so letting it get called away gave us a theoretical profit of about $1800.  We'll try to re-establish a position when the time is right, so stay tuned.

Adjusted for theoretical gains recorded so far on an initial position of 400 shares, a hundred shares remain with a cost basis of 41.22.  I'd intended for this to be a long-term position, and so we will be selling call options against it from time to time.  Specifically, I expect the stock to reach 57.49 before the rally cycle begun in mid-March is due for a rest, so that is where we'll look to do a near-the-money covered write.  My confidence in the target is high because of a recent stall a penny from the 55.07 midpoint of the bullish pattern shown.  If and when Newmont settles for two consecutive days above that number, or trades more than 50 cents above it intraday, a finishing stroke to the target will become an odds-on bet. _______ UPDATE (April 6, 3:24 a.m. EDT):  A strong upthrust has brought Newmont within putting range of the covered write we'd planned. Accordingly, I'll recommend shorting one April 57.5 call if and when NEM gets within a dime of the target. You can use your discretion on this, playing it down to the wire, but please note that I expect  the stock to make a tradable top with 2-3 cents of the 57.49 pivot. _______ FURTHER UPDATE (April 6):  Newmont head-faked on the opening bar to 57.31, and I am not amused.  For now, maintain the short offer as suggested. _______ FURTHER UPDATE:  It appears that, for a rare change, we actually benefited from the opening-rotation sleaze factor, since the call option we were trying to short opened on the high of the day, 3.00.  This effectively reduces our costs basis on the stock to 38.22 while giving us $3 of downside protection.  Newmont would have to move above 60.50 before the covered write starts to limit our upside potential.  If that happens and we simply let the stock get called

We hold 400 shares with a costs basis of 50.40 and a 50.27 stop-loss. Today only, offer a round lot to close for 52.14, retaining the stop-loss for the 300 shares that would remain.  _______ UPDATE (11:08 a.m. EDT):  After exiting a round lot at 52.14 , we now hold 300 shares with a profit-adjusted cost basis of 49.82.  That implies a $900 paper profit at today's so far high.  Since the purpose of these occasional "easy-as-pie" trades offered by Rick's Picks is to allow even relative novices to recoup the cost of a year's subscription, we are most surely ahead of the game.  For now, tie the position to a 50.75 stop-loss.  Once this pup gets above March 9's 53.21 peak, we can let it ride.  _______ FURTHER UPDATE (10:39 a.m. EDT):  In the chat room just now, I have advised taking another partial profit, selling 100 more shares at a then-current price of around 54.64.  The theoretical gain of $482 will effectively reduce the cost basis of the 200 shares (or multiple thereof) we still hold to 47.41. ________ FURTHER UPDATE (March 30, 9:41 a.m. EDT):  In the chat room just now, with Newmont flailing wildy after a sleazy head-fake on the opening, I have recommended exiting another round lot at a current price of around 53.73.  Officially, I'll record 53.60 as the sale price, though, since the stock is still acting crazy.  This leaves us with a hundred shares whose effective cost basis is 41.22

We hold 400 shares from 50.40, but it will take a push today above last Monday's 52.79 peak before we can breathe a sigh of relief.  For now, raise the stop-loss to 50.27, but plan on re-entering the position at 49.68 if the stop gets tagged.

The 400 shares we hold from 50.40 survived the 50.18 stop-loss I'd advised yesterday, but I have little confidence in the so-far feeble rally that has ensued.  It kept the stock hovering just above yesterday's lows, but that's about all.  For now, maintain the stop-loss as advised and note as well that NEM would need to touch 51.13 to get out of immediate jeopardy.