With one day officially closed for trading on Thursday – Thanksgiving Day – and Friday is a half-day, expect trading volumes to be low and volatility to dry up.
And while that’s what I’m expecting, it doesn’t mean I took the weekend off from doing my homework.
I’m ready for anything even though I don’t expect a ton of action.
In fact, I want to jump into it right away with a series that is easily becoming a favorite among readers: 3 Trades to Start Your Week.
Here they are:
Ohh you thought I wouldn’t pick ROKU? Well, you guessed wrong, didn’t ya?
Most of us couldn’t name the last time we used one of their devices. I can’t remember ever seeing one. That doesn’t mean the stock isn’t the best trading vehicle I’ve ever come across.
Consider what I’m staring at here with the 78-minute chart.
ROKU 78-minute chart
These are exact settings I ue to pick out my trades. This chart includes all the elements.
- Trend: The chart shows a clear uptrend that broke past the previous highs
- Pattern: Each swing high is lower than the last, while each swing low is higher than the previous one. This creates a price consolidation
- Squeeze: Squeezes occur when the Bollinger Bands begin trading inside the Keltner Channel. In this case, it makes red dots in the bottom chart.
Over the years, I developed my system by studying these patterns. They work over and over, even at all-time highs. The more disconnected the stock is from the broader market, the better.
Here all I want is an entry between the 21-period exponential moving average and the 8-period moving average. My target is an extension of 27.2% above the highest and lowest swing points in the pattern. I stop out when the pattern breaks.
Ideally, once the squeeze releases, it creates buying pressure that pushes the stock up past the previous highs. You can see how this played out previously where the red dots turned to green (indicating a release of the squeeze).
PTON (Peloton Interactive)
Don’t be scared of IPOs. They won’t bite. In fact, they work amazingly well for my trading strategy.
The bigger the interest in the stock, the more liquidity (volume) in the options. For trading purposes, it creates tighter spreads, which makes trading easier. Easier trading puts more money in my pocket.
Just the other day, I traded out of Docusign (DOCU) in my Weekly Money Multiplier account.
Point is they make excellent trading vehicles and tend to be wholly disconnected from the broader markets.
So let’s look at the 78-minute chart for PTON, shall we?
PTON 78-minute chart
If you didn’t know this was PTON, would you think it was a copy of the ROKU chart?
This is precisely what traders mean by a setup – something that repeats over and over!
I’ll repeat the elements for old times sake:
Trend: PTON is rising like Old Faithful at Yellowstone.
Pattern: The exact…same…pattern as ROKU.
Squeeze: Can I get a red dot anyone?
This stock might have more mustard in the jar than ROKU. When the squeezes release, they tend to take out old highs. Unlike ROKU, PTON is near its all-time highs. This lends itself to a slightly higher chance of success.
But man, I love this setup.
I like to maintain a balanced portfolio. While my bias is holding long positions, I want to keep a few bearish trades on.
XLNX sets up as a fragile stock that I expect will be heading lower. Take a look at the hourly chart.
XLNX hourly chart
This one isn’t as clean as the others. However, you still have all three elements present. The last time the stock visited this area it took a rocketship higher. So, I’ll be playing this one carefully.
When I want to limit my risk I’ll either cut my position to half of what I usually spend. The payouts still work well because the moves off downtrends are more violent than upward movements.
Consider stuffing your pockets this Thanksgiving
Why not try learning a tried and true method that averages more than three trades a day, over 68% gain on average, and 4 winners over 100% for the month of November?
Not to toot my horn or anything, but I’ve posted four winners that have returned +100% —with the average winner returning 68%—which is good for +$27K in trading profits this month. If you’re not in my service, I don’t know what else to tell you, except using this link to join Weekly Money Multiplier.
Source: WeeklyMoneyMultiplier.com | Original Link