Stocks getting squeezed are all the rage these days, and rightly so. Some of the moves have been epic. The reasons for each squeeze vary from stock to stock, but the price action is hard to ignore.
With that in mind, we've identified some potential short squeezes that also have the benefit of the technicals lining up in our favor. Check out our recent Freshly Squeezed report.
One of the names on the list looks like it's ready to go...
During a quick perusal of ETFs today, I noticed some extremely rich volatility being priced into options on the Retailers ETF $XRT - which isn't entirely surprising given the price action over the past week.
While volatility can certainly continue here, my gut tells me the premiums will fade away soon. Implied volatility is driven by fear and greed, but eventually the marketplace adjusts to the "new normal" and the premiums people will pay for volatility they are now used to will subside. This is where it can be advantageous to put on delta neutral credit spreads.
Earlier this week, the All Star Charts research team did a deep dive on China stocks. Say what you will about the political tension between our two countries, we speculators only care about where money can be made. And when it comes to China, using options to define our risks makes so much sense here.
One of the stocks highlighted is in the hot electronic vehicles space that has me interested.
One of our biggest winning trades of 2020 has been consolidating over the past month and is setting up for what looks like another high-intensity workout. While it would be wishful thinking to expect another complementary ride like the last one, I do think there is a way to capture some gains without having to push all out again!
Software names have been leading the charge in this bull market. And if stocks are setting up for another extension of this bull run, I expect a lot of the leading stocks will come from the software space.
While scanning the latest All Star Charts Quarterly Playbook, one stock the team highlighted gave me a buzz of excitement. A household name found on seemingly every corner in America is breaking out and giving us a brief pullback to get in.
While checking out my list of liquid ETFs to get a feel for the markets this morning, it caught my eye that Gold is currently sporting the highest implied volatility (as measured by IVRank). I suppose it is no surprise given the amount of volatility we're seeing in Gold's distant, but currently more popular second cousin, cryptocurrencies.
You'd think Gold would be trading similarly.
However, looking at the daily chart, it appears $GLD is getting stuck in a range bounded by 184 on the upper end and 166 on the lower end.
I'm loving this new Young Aristocrats report the All Star Charts team as recently begun producing. There have been some great ideas here for me in helping my son build a long term investment portfolio of names with both price appreciation potential, but also steady and increasing dividend growth. Sometimes, traders forget this is what stocks are supposed to do!
Of course, while scrolling through the list, one of the names caught my attention for a tactical options trade. You can say I "discovered" this opportunity...
I don't know about you, but I'm super excited for this coming year. I'm expecting volatility in both directions. And volatility = opportunity for options traders.
That said, let's not rush into anything. I know... if you're like me you're itching to start firing off trades.
But as the opening 90 minutes of trading has showed us so far today, things can get slippery fast as people and institutions start putting money to work and rotating money around in often sloppy fashion. This is pretty typical in the first couple trading days of any new year.
Many of you know that one of my favorite bullish setups is a stock making new all-time highs, with $100 per share within our sights. So many times stocks are attracted to that big round psychological number. It doesn't make any sense (like stocks rallying on the announcement of a stock split), but we don't care. It's something we've observed time and again and betting on a stock getting there is practically money in the bank.
While $100/share is typically where we see this behavior, the same principle holds when a stocks approaches $200, $300, $400, etc.
With this in mind, a stock mentioned in recent Under the Hood report is finally popping today and we're getting involved.
It's that time of the year when shopping is on everyone's mind. I don't know about you, but my house has been under a mini panic as we scramble to make sure everyone's gifts are accounted for as he head into the final week before Christmas.
Clearly, this scene is playing out in households all across North America and it is being reflected in the share prices of online shopping venues.
JC published a bullish piece on Japan today. He's been pounding the table on the potential for a massive base breakout for some time. He's so exited about it, we even traveled to Tokyo last year to see what's going for ourselves!!
One of the names he mentioned in the post stood out to me and I'm willing to step in and take a position.
