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Not too long ago stocks were at all time highs but now we are worried about the next collapse.

The headlines are building up fear as we enter the upcoming election, concerns over the Affordable Care Act, and the economic outlook for 2021, pandemic cases rising, and weak Q3 earnings. 

But if you can look through the mayhem, there is always opportunity to make money in these markets

Take Jim Cramer’s Investing Rule 25: There is always a bull market somewhere, and I will try to find it for you!

As corny and cliche as it sounds…it’s true. 

You see, despite the sell-off we’ve seen this week, there is still a bull market.

That “hidden” bull market can be found in the dark pools. 

Dark pools are one of my favorite places to look for momentum and where the money flows in the markets

It’s where the major institutions go to trade outside of the public’s eyes.

And I follow the momentum from the order flow in order to gain an edge in these chaotic markets

So I leave you with this… 

There is a health and fitness stock that I’ve come to love that could be my next trade from the dark pools.  

Just give me 2 minutes of your time and maybe I can help you find the bull market you are looking for.

There Is A Bull Market Somewhere

Every morning before the market opens I send a watchlist out to my dark pool subscribers to prepare them for the day ahead.

And on my dark pool watchlist I’ve told everyone to keep an eye out for strong price action in this one health and fitness stock that I’ve grown to really like.

I’m not talking about your mom’s Richard Simmons DVD’s either… 

Instead, I’m talking about the hot (and hip) new company, Peloton (PTON), which is taking the group fitness market by storm.

And it’s been on my radar since I last traded it.

You see, just because I trade a stock and exit doesn’t mean I forget about it.  Sometimes new price action sets up in the stock and I want to make sure it’s on my watchlist to get in a second time.

The bottom line, don’t fear “double-dipping” into a stock but instead, think that it’s the gift that keeps on giving.

At the end of the day, PTON shows a ton of dark pool money flowing through the stock

Here is what I saw in the dark pools today on my Dark Pool Scanner

So let’s break this down further…

In my option, PTON has been strong recently and has seen a slight pullback in the last few weeks.  I’ve noticed that PTON has hit the scanner several times over the past week, but nothing of this size.  

What I saw today was that a trader put nearly $100 million into the stock at the end of the day.  

With the stock sitting at critical support levels, PTON could be setting up to make it’s next leg higher at any point now.

Here’s a daily chart of PTON

Source: Thinkorswim

Recently, PTON has been consolidating near its moving average support levels and it’s 23.6% Fibonacci Retracement level.

In my opinion, this is starting to shape up to be a strong level of support for this stock.  Now, according to the volatility squeeze indicator, it appears that buyers have backed off, and sellers are starting to take hold, as volatility is tapering off from it’s highs.

Now, this doesn’t necessarily mean it’s a short, but that the bulls and bears are just fighting it out on the court.

But I need more information, so I will drop down into a 4 hour chart to find more information about the stock intraday.

Here is the 1 hour chart on PTON

Source: Thinkorswim

Over the last few days, PTON has been consolidating at the $120 price level as also seen on the daily chart.

At the same time, it appears that the bears have grown exhausted and the bulls are starting to take control of the stock price again.

This can be seen in the volatility squeeze indicator a red zone is forming, meaning that the bulls and the bears cannot agree on a direction to take the stock.

But this indicator doesn’t tell me what the future holds… that’s where dark pool order-flow, short floats, and previous occurrences can help pick a direction.

Let’s break down the 3 criteria here:

  • Previously, there was consolidation in early September around prior support levels.  The bulls and bears could not pick a direction, and a volatility squeeze was formed.  This ultimately led to the bulls winning, and the stock broke all time highs at $100 and ran 40% higher!
  • Dark pools are confirming interest in PTON, with nearly $100 million transacted on this stock today at the close.  If these are buyers, this is an extremely aggressive trade and could send the stock soaring higher.
  • The short float on this stock is considered to be moderately heavy.  Typically, a stock  like AAPL (or similarly neutral stock) will have a 0% to 0.5% short float on average.  PTON has around a 5% short float.

What does a high short float mean?

Having a high short float means that the stock is heavily shorted and momentum traders may look to pile in and drive the stock higher

Let’s break this down further.

There are 239.27M shares floating.  In other words, the number of shares that are available for people to trade.

Of those 239.27M shares, there are nearly 20M shares that are short, which equals around a 5% short float

That means PTON is a moderately/heavily shorted stock and to me, this creates a potential short squeeze.  

And if PTON continues higher… the shorts may no longer be able to take the pain and be forced to cover (buying the stock) which will further cause the price to go higher, in my opinion.

In turn, this can cause demand for NIO to pick up… and you know what that means.  

Demand rises, and supply remains the same…  prices go up!

But I’m not trading it just yet!

I’m going to keep a close eye on it the rest of this week because on the daily chart, there is still no volatility squeeze occurring.

Source: Thinkorswim

Now in my opinion, I am going to wait for one of two events to happen…

  • The squeeze to get triggered in the stock, and if it holds up near these support levels, PTON could be in a spot for a huge run through all time highs again.
  • More buyers come into PTON in the dark pools causing a short squeeze to occur and force the price higher as the current short sellers are forced to cover

So traders, PTON is on my radar! And I’ll be sure to let my subscribers know in real-time if I make any moves.

Make sure you don’t miss out by signing up to Dark Pool Profits today!

 

Author: Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.

We’re on pace to have one of the busiest IPO weeks this year. 

There will be 16 companies going public, and I expect a lot of action in the IPO space over the next few trading sessions. 

Of course, the market is quite choppy overall right now.

So I also want to keep a lot of my trading attention on IPOs that I’ve already successfully traded — ones that have a solid history of price action and that are showing some discernible momentum. 

Rinse and repeat is the way I like to describe it.

What has worked for me throughout October is trading new stocks that are riding growing digital trends. 

That includes Cloudflare (NET), which I took an average of 150% gains on; Crowdstrike (CRWD), which I took a 100% win on; and SFIX, which I took an average of 125% gains on.* 

Two of those same stocks showed up again on the 3-stock watchlist I want to share with you today.

Cloudflare (NET) 

  • Cloudflare is a company that provides web infrastructure and security. Its products help sites protect against threats and improve and speed up performance and load times through its international data centers.

 

  • As a cybersecurity stock, NET is poised to ride some massive trends as more people are online now than ever.  Global cybersecurity is on pace to hit a market size of $208 billion in 2023, up from $150 billion in 2019.

 

  • With current YTD gains of 218%, NET has been massively outperforming the overall market, making it one of the clear IPO winners of the year

 

  • Even over the past month, the stock saw peak gains of 37.52%, beating that of the Computer and Technology sector’s gain of 7.9% during that period

 

  • The stock has seen a lot of momentum, but has been consolidating around the $55 mark. My plan is to look for opportunities to get long if it can hold a base there and then ride the stock to new all-time highs near $65. 

Stitchfix (SFIX)

  • Stitch Fix is a company that provides personal styling services online. Using data and algorithms, it can recommend clothing to shoppers based on size, style, and budget.

 

  • The company has gained popularity as buyers have shifted away from brick-and-mortar retailers over the recent months.

 

  • SFIX has gained over 35% since the last earnings report about a month ago, in which the company announced revenues of $443.4 million, up 3% from that period a year ago.

 

  • The stock has held a bullish trend spectacularly over the past month and is now entering a consolidation or “squeeze” around the $35 level.

 

  • SFIX has the potential to explode out of consolidation, and I’m interested in buying call options slightly at or out-of-the-money that expire the following week. But as always, I’ll be maintaining a protective stop, in case things move lower from here. 

Bill.com (BILL)

  • Bill.com is a top provider of cloud software to assist workflow and payment processing. The company digitizes, simplifies, and automates financial operations of companies that are small to midsize.

 

  • The company is a large part of the current digital revolution that’s helping companies shift away from manual and paper-based cash flow.

 

  • The company has an earnings report coming up, which it will announce on November 5, 2020— a strong catalyst that we could see a run into. Revenues are rock-solid this year, having jumped from $32.9 million in the final quarter of 2019 to $38.8 million in quarter 2 of this year.

 

  • BILL is showing some really impressive momentum, up 179% so far this year— and with a current trading volume of 325,485 shares.

 

  • The stock has been trading in a well-defined range and looks like it could bounce off the $100 mark for a run to new all-time highs

Receive My Critical IPO Payday Alerts

 If I decide to jump into BILL, NET, or SFIX, my IPO Payday subscribers will be the first to know.

To learn the exact strategies I’m using to trade stocks like these in real-time, check out my latest IPO trading workshop here.

Author: Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.

If you want to be a profitable trader— just buy low and sell high in order.

Right?

Of course, that’s easier said than done.

To become successful in the markets, traders need a defined edge.

My edge is spotting unusual trades that occur in the dark pools, or the “back alleyway exchanges” institutional traders go to get deals done.

I take my decades of experience as a trader and pair it with what the institutions (“big money players”) are doing…

… All thanks to my scanner that sniffs out their moves. 

I recently spotted a stock that continues to hit on my dark pool scanner…  

Today, I’ll share how I took advantage of the action and doubled my money fast.

 

Can The Tech Stocks Keep Going Up?

The tech stocks from the 1990’s and today are two totally different companies now. 

What was once used to be considered high tech, is now outdated or sitting in a landfill somewhere in a pile of trash.

You see, tech comes and goes, but only a few have the chance to set trends and stay around longer than others.

And that’s what I think about when I hear social media and tech being used together.

Unlike a real tech company (even though they may be using the same tech that’s industry leading), they often provide other value-added services than just a hunk of metal being sold to customers.

And that’s what I think about when I hear of Twitter (TWTR), Facebook (FB) and Pinterest (PINS).

When you look at those 3 companies in the “tech” space, they are not the same as Apple (AAPL) or even Google (GOOGL).

Social Media Leads The Way

You might be wondering why I think tech stocks will keep going up.

Consider the Invesco Tech ETF (QQQ), which is up a whopping 20% in the last 2 quarters. 

There is this one saying when trading, “Always trade the strength”, and I believe this is what is happening here.

One area of tech that is strong right now is advertising and social outreach. 

Now that these have become the new trend in 2020, we need to think about what platforms are going to launch these industries forward.  (Hint: It’s not your typical FAANG stocks from the early 2000’s).

One stock that is rocking earnings this season— and that has caught my interest due to higher than average Dark Pool volume— is a company in this exact social-media side of tech.

I love hunting for momentum patterns to trade— and this stock was not only forming one, but two of my favorite setups.

Back on September 18th I let subscribers know that I saw unusual dark pool activity in Pinterest (PINS) when it was trading at $37/share.

This stock interested me due to the recent momentum squeeze that was setting up in the chart pattern.  The chart pattern was also a pullback into momentum moving averages as well, so I had fairly high conviction on this trade.  I wanted to be long near $37 (in the consolidation area).

PINS in this case made a huge run from $37 to $45 in the week following the alert.  It allowed me to capture phenomenal profits in the options market off of this trade, landing almost a 250% gains* or almost a money tripling return!

And when I saw it creating a bull flag or pennant chart pattern, I knew I had to play this for the breakout heading into earnings.

Here’s the chart pattern below:

First, notice the flagpole, then notice the sideways, flag/pennant action going into the momentum moving averages, and finally notice the breakout

When everything was said and done, I sold my PINS Oct 16 $38 Calls at $7.60 on the first day of the breakout and bought some longer dated calls to capture the momentum that was about to come.

Keep Momentum On Your Radar

With these momentum plays, it’s important to keep them on your radar even after you trade them, in my opinion.  Another trader could hit the dark pools with buy orders or another pattern could always pop up, and that means another opportunity for me to potentially make money on this stock.  

That’s why I always create a master watchlist for possible dark pool trades that I want to keep an eye out for.

You see, if PINS decides to come back down into its moving averages or signal a momentum squeeze, I want to make sure I am watching this stock to jump in at the right time for more money tripling profits.

And you see, there is another stock that is showing the same pattern as PINS, and it’s also in the same tech space.

Facebook (FB)

You see, FB is showing a flag/pennant set up, just like PINS did before heading into earnings. 

This could lead to potentially huge market moves if this momentum pattern plays out the way it’s looking like it could.

Now, I don’t want to trade the stock just yet. I actually want to keep it on my radar for when large institutional traders place monster bets on this stock in the dark pools.

And once they signal they are buying FB, I will want to use my momentum indicators to give me entry points after I spot the dark pool trades going off.

Listen, understanding price action has been giving me my defined edge against other traders in this market.

I want to show you how I uncover momentum in any stock and trade them with confidence.  That’s why I put together this exclusive package.

You’ll discover my three favorite patterns to hunt down momentum before the stock takes off.

You’ll also be the first to know what stocks I trade right off of my watchlist.

Sign up to Dark Pool Profits here and learn how to trade what institutions are trading.

Author: Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.