Some weeks are better than others. I’ve had a few award me double-digit returns. However, it’s rare that I get close to a 1000% return on a trade.
This week happened to mark one of those moments. I executed a beautiful trade with Weekly Money Multiplier in AutoZone that came up just shy of a 10 bagger.
This is one of my biggest trades in 2020!
Let me tell you – it isn’t easy to find massive winners like this. But I have a few stocks on my radar that I think could provide some explosive profits in the coming week.
Spend some time with the family on Monday see you can get to your charts early on Tuesday morning and kick off this trading week.
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Lamb & Weston Holdings (LW)
Maybe you are old enough to remember Saved By The Bell middle school episode where Zach and the gang lost a lot of money on potatoes. They were missing a TPS set up on a potato supplier like Lamb & Weston.
A friend of mine recently brought this chart to my attention, and I really love this setup. This fits a classic TPS strategy with a fantastic risk-reward.
LW 130-Minute Chart
Here’s what I see when I analyze this chart for my TPS strategy:
- Trend – I see a clear trend that is preceded by an explosive move higher in the stock off the back of its recent earnings.
- Pattern – The upper trendline connects the highs of the candles in a descending fashion. Underneath, the low points are connected in a slightly ascending trend. This creates a triangle consolidation pattern.
- Squeeze – At the bottom, there is a series of red and green dots. The red dots indicate a squeeze when the Bollinger Bands move inside the Keltner Channel indicator. This is where I want to enter. When it turns green, the energy from the consolidation is released.
Here’s what I especially like about this trade – normally I stop out when the squeeze releases and the pattern breaks.
Because price is so close to the lower trendline, the amount it could fall relative to a breakout above the pattern is tiny. That means it gives minimal downside risk with a lot of upside potential.
With implied volatility extremely low across the board, I’d look to play this trade with call options. Since I’m using the 130-minute chart, I’d go out about two weeks with the expiration period.
Twillio (TWLO)
This trade fits more with Jeff Bishop’s money pattern than my TPS setup. However, I think the chart is worth discussing for a trade idea this week.
Twilio ran higher for nine days straight before finally having one down day. However, that apparently was enough to stop this relentless uptrend dead in its tracks.
Here’s what I’m talking about on the daily chart.
TWLO Daily Chart
The previous lows from where the stock found support on its drop now act as resistance. Before that, the same level acted as support on the way up. So, when the stock ran into this level, it reversed.
Now, let’s break it down to the hourly timeframe.
TWLO Hourly Chart
I highlighted the recent moving average crossover in yellow. Jeff calls this the ‘money pattern’. It occurs when the 13-period simple moving average crosses over or under the 30-period moving average on the hourly chart. Here it crosses below, while at key support.
So, this setup tells me the stock wants to trade lower. However, I want to be cautious in such a bullish market. I can either play this trade with long put options or selling a call credit spread.
If this stock closes above the previous highs, then it’s broken resistance and the trade is over.
Kinder Morgan (KMI)
This chart isn’t the cleanest TPS setup, but it has some potential. KMI’s 130-minute chart looks pretty decent here.
KMI 130-Minute Chart
Typically, I want a larger move than we saw recently to create a trend. You can see how the first move led to a consolidation and a squeeze that fired higher into the current pattern. However, I do like that the current squeeze is preceded by a squeeze that worked out to the long side.
Now, the red bars at the bottom indicate the momentum has shifted to the downside. So, I’d probably wait on this one before stepping in. I want to see things consolidate longer and shift direction. That would give me confidence the uptrend isn’t over.
Learn how I developed my TPS strategy
I get a lot of questions about how I created my TPS strategy. It wasn’t something I discovered overnight. It actually took 8 years.
In the end, I turned $38,000 into over $2,000,000 in two years. You can learn about the steps I went through in my upcoming webinar. I explain how I went from an unprofitable trader to a RagingBull guru.