A stock of interest for us recently impressed investors with their latest earnings report, sending shares on a gap higher at the open today. Now that the event is out of the way, options pricing (in terms of volatility) has collapsed, giving us a great opportunity to participate in what looks like an ideal candidate for a "Post Earnings Drift" move higher.

A beauty chart on monthly, weekly, and daily timeframes is setting up just under a major magnet level; there is an an earnings catalyst on the horizon which may goose the action in our favor quickly; and the premiums are relatively cheap for an upside bet. What's more, the company behind the stock offers us a great opportunity to sleep well while we ride out our thesis. What's not to love?

What stock could possibility offer all this?

As long as Mr. Market wants to keep grinding volatility premiums in options lower, we'd be foolish not to be buyers of long calls with expirations 4-6 months out in individual names that are showing signs of upward momentum. Who are we to argue with Mr. Market?

The next candidate on our list hails from the telecom space.

This is the video recording of the April 2019 Conference Call for Members of All Star Options

The "Gap and Go" pattern is popular with intraday and swing traders. It is a situation where a stock gaps higher out of a base (often earnings driven), then punishes the opportunistic faders who are playing for the stock to come back and "fill the gap." The opposite happens, resulting in a slow, painful grind higher hurting all those short holders.

We've got such a situation developing in the semis space, where a slow grind up has beaten all the faders to a pulp and now it appears we might be setting up for one final push to inflict hurt on the final stubborn bears.

In light of DowDuPont's $DWDP recent spinoff of Dow $DOW, it makes the maths a little more complicated on our trade.

Here is the press release from the OCC: https://t.co/QhpJMykSi8 (click the link then launch the pdf)

The short story is this: $DWDP investors are now entitled to one share of $DOW each every 3 shares of DWDP held.

This means that the true value of our options is price of DWDP stock + one third price of DOW stock (approximately).

In Texas, it's often said: "Go Big or Go Home."

We intend to do just that with a simple options play in a State of Texas namesake.

The All Star Charts team is not wildly bullish on US stocks here, though the consensus is that eventually we resume higher out of some sideways action that might take a few months to work through. That said, there is one sector we feel will lead us higher when the time is right and we've got a candidate stock that offers us a good opportunity to express our mildly bullish stance while keeping our risks manageable.

Due to a scheduling conflict around the annual CMT Symposium in New York, JC and I will be doing our monthly conference call a little later in the cycle this month. But have no worries, I'll provide some updates below on positions we have open with April options that may need some attention or adjustments.

I don't often take long premium plays ahead of an earnings event, but there's one coming on the horizon where the options pricing isn't too high (yet) and the All Star Charts team has a price target that would yield us a greater than 4-to-1 return on risk if the earnings catalyst plays out in our favor.

A year ago, I made a commitment to healthier eating. Not that I was a slob or anything, it was just that my attitude about what I was willing to put into my body (basically anything) needed to change. At my age, you begin to think about these things.

That said, I'll still happily get long stocks of fast food companies that are poisoning the human race if there's a way for me to profit from it (then spend the earnings at the local vegan grocer!). And one household fast food chain is setting up for a big potential move.

You probably thought this would be a piece about US stocks, didn't you?

While it certainly looks like the Christmas lows in the US are going to stick around for a while, the All Star Charts team is also detecting some broader potential breakouts overseas that we can participate in with options on index ETFs.