Expert technical analysis of financial markets by JC Parets
No matter what the market, geopolitics, weather, congress, The President, retail demand, the news cycle, or even the price of the commodity itself throws at oil stocks, they just… keep… winning.
These are not trends I like to fight.
And it seems options markets aren’t willing to fight it either as today’s trade is in an oil sector bellwether that is now pricing in the lowest volatility in over 9 months as the stock flirts with post-Covid highs. [Read more…]
After we got past sharing each others’ Thanksgiving dinner menus, wine pairings, and recipe swaps, the All Star Charts gang got back to business this morning hunting for trade ideas.
We arrived at today’s idea in a roundabout way:
“Discretionary stocks have been the ‘least shitty’ performers as of late.”
“We’re seeing relative strength in ‘da homies. [Homebuilders]”
“In that sector, Lennar $LEN is showing the best relative strength relative to the others.”
…and that is a taste of how the Thanksgiving sausage is made.
So let’s dig into some visuals to highlight what we’re seeing. [Read more…]
While bargain clothes shoppers seem to be driving profits in a way Wall Street likes, it takes a certain kind of trader to buy stock in the company when it’s making new All-Time Highs.
Well, I just happen to be that type of trader! In fact, one of my favorite setups is to buy stocks making fresh all-time highs. There is no overhead supply of bagholders looking to dump the stock to get back to even. Nothing but blue skies ahead.
And when options premium has collapsed, we can buy long calls to put ourselves in a position to enjoy the possibility of unlimited gains.
Let’s go shopping!
After some pretty significant broad market moves in both directions in recent weeks, it’s starting to feel like market participants are a bit tired. And can we blame them?
While volatility is often beneficial to active traders who have a good game plan to pounce at opportunities that are presented in such environments, eventually, we get tired. It’s exhausting.
Knowing this, we can take advantage of this potential situation by crafting trades that take advantage of the likely decrease of options premiums that often takes place when traders are tired and stocks and indexes start trading in smaller ranges.
So let’s use the Utilities sector to express a bet on compressing ranges…
So we were talking about a guy who’s apparently subsisting only on McDonald’s patties for the next 30 days. Just the patty — no bun, no condiments, no lettuce. He’s trying to prove some kind of point that it’s not McDonald’s burgers that are unhealthy, it’s everything else in a typical American’s McDonald’s order at the drive-thru window.
Ok. Whatever.
But all this “healthy McDonald’s” talk got us thinking about the even healthier looking chart of its stock $MCD in recent weeks: [Read more…]
We’ve got an oil stock on the doorstep of multi-year highs, a recent shakeout that probably rinsed out the hot-money crowd that came into the stock following their latest earnings report, and implied volatility plumbing new yearly depths.
This sets up an excellent opportunity to take a flyer on a simple long calls trade.
Let’s dig in! [Read more…]
“Why do you rob banks?” authorities asked notorious bank thief Willie Sutton.
His response: “Because that’s where the money is.”
We’re not planning on robbing anybody, but if today’s trade plays out like we think it can, it might feel like we’re stealing. Only, we won’t need to worry about the authorities coming after us, nor will we need to feel bad about it.
Our Analyst Willie Delwiche says that a basic requirement for many bullish ideas right now is that any stock or ETF in question needs to be above August highs. Anything below August highs is subject to a rude reversal. I’m on board with this line of thinking.
So, today’s trade is in an American bank that is above its August high and showing signs of wanting more.
With strength starting to stand out in more and more sectors, we have a few good setups that we like for long trades here.
In chatting with our Head Technical Analyst Steve Strazza today, he pushed me in the direction of today’s trade by highlighting the fact that if this one moves, its likely to move much faster and stronger than a couple of the other ideas I was interested in.
And the options in this stock are set up in a way that we can play this idea with a simple long calls trade. I like that. So let’s dig in. [Read more…]
