Today's trade is in a stock that recently announced earnings. The reaction was muted, which I think is a good thing. It left the chart sitting right where I'd like it to be, holding the recent lows of a 4-week pullback.
The beauty is that this gives me a nearby risk management level, so I'll have an opportunity to keep losses to a minimum if the rebound doesn't materialize.
Even though this stock blasted off following earnings last week, it might just be getting started. The second "take" is what I'm here for.
However, with the immediate catalyst in the rear-view mirror, I will proceed going forward under the assumption that there may be some well-deserved consolidation in store while the stock works its way higher over the next 6 months.
So I'm going to attempt to get paid to ride out any potential wait.
Today's trade is in a name that JC liked on his recent Mid-Month conference call.
The stock is hanging around the upper end of a "box" it's been in, just below all-time highs. And with earnings coming up in a couple of weeks, it feels to me like it's just waiting for that "all clear" catalyst to allow it to break higher.
While me and the All Star Charts gang have been pounding the table on China for several weeks now, it is still a mostly hated and certainly misunderstood trend. But that's mostly because people are reading the political headlines and ignoring the only thing that doesn't lie to us -- price.
So I'm putting on a trade that might take some heat, and I'm in it to win it.
I've consulted with the consultants, who agree that we should buy 52-week highs that would put us in spitting distance of all-time highs.
And so I shall do just that.
Today's name has somewhat elevated implied volatility, and it's a high-priced stock, so I'll be playing it with a call spread to keep my exposure in check and leverage the out-of-the-money call premiums in my favor.
Today's trade is in a computing company we all know. Some might think their best days are behind them, but the price action as of late would indicate otherwise.
And with what feels like a gift of a pullback to get positioned into, we're going for it!
Suppose you're watching the evening cable news, reading the New York Times (or newspaper of your choice), or paying attention to your echo chamber on the socials. You'd be right to assume all the economies of the world (both friends and enemies of the U.S.) are staring into the abyss and their stock markets are about to be cut in half.
That's cool if you'd like to live that way. I doubt it'll make you any money, though.
You're smarter than that. This is why you're here. We're not affected by headlines. We follow price.
And the relentless bid in Chinese stocks cannot be ignored.
Regardless of the market environment, a company like Visa will keep printing money.
Considering the vast majority of purchases involve credit cards these days and Visa is a dominant player in the space, Visa takes a small cut every time you swipe or tap your card. Good business to be in!