The Analysts here are getting all bulled up on Nuclear energy. And for good reason -- some good clean charts.
One of the sector leaderss is showing signs of resolving a base that began forming in September after an impressive doubling off the lows set this Spring.
Objects in motion tend to stay in motion (I heard this once in a high school science class).
The stock is cheap and we can leverage into it to really juice our gains with out-of-the-money call options.
Today, a "darling" company in the media thanks to new obesity drugs and other good news hitting the media airwaves is selling off. In fact, its having its worst day relative to its sector peers in many years.
Someone forgot to tell Eli Lilly $LLY that a new bull market run may recently have gotten under way. Of course, it was already way ahead of the game. In fact, look at this long-term chart:
These aren't usually the trends I like to take the other side of.
But perhaps it's gone on a little too long and it's ready to pause and retrace?
This stock could get cut in half and the long-term trend would still be intact.
When we zoom in a little closer, we see a very notable (and sizeable) gap from this summer where the stock jumped from $450 per share to north of $500 per share overnight:
This is definitely a "hard" trade. Hard because it's already had a tremendous run this month. Hard because it's in a name that people often don't associate with big bull runs, in a sector that definitely isn't sexy.
And maybe we're early, positioning just about when it's about to take a pause or retrace to digest recent gains. Maybe.
The only way to find out is to get involved.
The hard trades pay precisely because they are hard.
Crypto is showing signs of a resurgence. With Bitcoin trading north of $35,000 this week, many of the old bulls are coming out of the woodwork calling for the next crypto run.
Well, if the next run is soon at hand, today's trade is in a company that is certainly positioned to benefit from any uptick in sh*t coin trading volumes.
The market is speaking. It wants higher prices. The year-end, seasonality-driven rally may be taking hold. Or it may be something else? It doesn't really matter. We only follow price, and right now prices in certain stocks are pointing us to start taking some directional bets.
Today's trade is in an industry-disrupting name that has already had an impressive move over the past week that we feel is only the beginning of a much larger drive.
Check out this chart of everyone's favorite ride-hailing service Uber Technologies $UBER:
If these were the first three lines people read in a book about profitable trading, odds are many wouldn’t make it past the first page.
It’s natural for humans to want to avoid pain, to choose the easy path, and to put in the least amount of work for the maximum amount of output. Business schools call this “efficiency.”
And you can find plenty of examples in the real world where this is good, solid advice.
Trading is not one of those places.
The hard truth is that 80-90% of people who attempt trading in any capacity, frequency, or timeframe eventually end up net losers.
The powerful rally in stocks shows where the "pain trade" is (higher), and now I'm on the hunt for strong, leading stocks that will continue to turn the screws on the bears.
JC wanted to put this trade on yesterday (I think he did), but I wanted to wait until after the Fed announcement juuuuuust in case. You never know what shenanigans may take place on binary event risk days.
Well, my patience was rewarded. I am able to put the same delta-neutral credit spread on today at the same premiums that were offered yesterday, but now I don't have to sweat the fed.
Consumer Staples stocks, as a sector, have been displaying relatively high implied volatility in their options and so I wanted a name from this space that was stuck in a range.
The candidate that we all agreed on was Proctor & Gamble $PG:
The Junior Gold Miners appear to be temporarily stuck in the rocks. And with juicy options premiums to sell, we will take advantage of the range with a delta-neutral credit spread.
If/when the market can find it's footing, today's trade is in a name that I'd like to get aggressively bullish in for a long-term bet.
In the meantime, I'm not ready to be aggressive yet, but there is an opportunity for us to get paid to wait with a conservatively bullish bet that gives us room to be wrong.
Microsoft $MSFT announced earnings last night, and while the stock gapped higher at the open, it has spent most of the morning giving back much of those gains.
It looks to me that the prior trading range for $MSFT is acting as a powerful magnet. And the broader market weakness sure is helping things along in that regard.
At the end of the day, the market is telling us that the latest earnings report hasn't really changed any minds of Microsoft bulls or bears, and therefore, we're likely to remain stuck in this range until some new information reveals itself:
We options traders can benefit from this scenario.