KO and TSO Update
Just sharing a few thoughts on the two new trade entries. Overall, I have very little directional bias for the broader market which is why I didn’t put too much money to work on my new trades. Earlier I entered KO puts and TSO calls. Both trades have everything to do with the simple 7 day moving average and stock performance.
Starting with KO, it has underperformed the market significantly during the past month. Momentum turned negative last week with the MACD and the stock is trading below the 7 dma. Those of you who have followed my trading over the years may recognize this as a ‘vibe’ bear signal. Because the market continues higher, I decided to only do a small position on KO and I have earnings to potentially help my trade if the stock fails to move until then.
With TSO, I am following the pattern of DE, GS, and HD that have been so good to me. In all 4 cases, I bought calls as the stock was sitting near a 52 week high and making a fresh move above the 7 day moving average. Hopefully TSO will run the same course we’ve seen from the other 3 over the past months. One thing to note with TSO is that it will be volatile. Strong moves both up and down are the norm for the stock especially when the analysts start chiming in like they did today. For now, I plan on riding the stock with the 7 day moving average.
Overall, I still have plenty of cash to put another trade on when I see a nice setup. Happy Trades, Jeff