I'm out of town this week. So in lieu of the usual daily note, we've arranged for guest posts written by each of the members of the All Star Charts research team.
For those unfamiliar with me, I've been fortunate to work alongside JC and the All Star Charts team for the past three and a half years.
It's been an incredible journey of learning and growth, and I truly cherish the work I do here.
My focus primarily lies in U.S. and international equities, where I contribute daily through the creation of multiple insightful notes and reports.
This summer marked a significant milestone for me as I ventured into the exciting world of options trading, working hand in hand with Steve Strazza on our Breakout Multiplier strategy. But that deserves its own discussion!
Throughout my journey, I've developed a deep fascination with insider trading. I believe strongly in the value of understanding and leveraging the flow of capital from “intelligent money”.
To this end, I help run our 'Hot Corner Insider', where we analyze insider activity – think of Form 4s, 13Gs, 13Ds, and even political filings. I've got an entire spreadsheet with this stuff.
Each morning, we send a note highlighting the most significant insider transactions from the previous day.
And let me drop some knowledge on you. The secret sauce to insider trading often lies with the CFO and their expertise behind.
These folks know the financials inside and out – the numbers, the statements, and sometimes, they just have that gut feeling nobody else has.
When I see a CFO stepping in, buying some shares in the open market, I pay close attention.
Then, it’s our job as technicians to identify the trend and look for favorable risk-reward opportunities supporting these transactions.
I couldn’t think of a better example for this topic than Sequoia Capital's Roelof Botha buying $25 million in Block $SQ back in August 6.
As the former CFO of PayPal and an early investor in YouTube and Instagram, Botha has a proven track record of identifying and supporting groundbreaking companies.
His guidance has been instrumental in successful IPOs like MongoDB and Unity, and he recently led Sequoia Capital's investment in Elon Musk's acquisition of Twitter.
Given his exceptional ability to spot innovative tech ventures, his market activities warrant close attention.
Here’s the SQ chart, marked up to show Botha's purchase:
Botha stepped in the day after SQ - and indeed the broader market - put in the lows of the year this summer.
He literally bought the dip.
Since then, the stock has ripped over 60%.
SQ spent over two years building a rounding bottom formation and it’s now breaking out. Price is piercing through the upper ends of this range.
As technicians we like to wait for confirmation of a valid trend reversal.
As long as we’re above $88, it will mark the completion of this formation and embark on a new uptrend.
