I know I repeat myself, but Fractal Energy really is the only gauge for how a stock’s internal energy is acting
When I’m looking for a trade to set up, I need a few things to play out first.
I need the price action to be exhausted
The stock must be trading at key technical levels
Fractal Energy must support the price action
This is my “checklist” before placing any trades.
Remember, technical analysis can only get you so far, the rest needs to be done by the trader to make sure this is a trade that’s worth taking.
Which is why I use 3 different signals to give me the best overview of the trade I’m about to take
Here is an example of SMSI that I just closed out for:
Here is the trade alert my Options Profit Planner members received when I entered this position.
SMSI: I sold the Oct ’20 $4 put for $.60. SMSI ended the week at $3.62. I rolled this out to Jan’21 for some nice credit.
SMSI Rollout: I rolled the Oct ’20 $4 put to the Jan ’21 $4 put for an additional credit of $.40. My breakeven on the share is now about $3. SMSI finished the week at $4.83 and I have a nice profit going.
For those who aren’t counting… my total profit is now up to $1.00 per contract.
And now I just sent out my alert to exit this trade…
SMSI: I will buy back my Jan ’21 $4 put for $.10 or less.
Which lands me over a $0.90 profit on this trade in just a few short weeks or about a 90% return on my investment!
Now let’s take a look at another trade I just closed out for nearly a 90% profit*
You see a similar pattern in this trade as well.
I found where Fractal Energy was getting charged up and let me know the stock was going to start trading higher once the Bollinger Bands supported the price action.
Now, I of course cannot predict the future price of a stock, but statistically, I had a good edge it was going to trade higher
So, I sold Puts that were below the technical support 52-week low
And my Options Profit Planner subscribers received this alert when I was trading these puts.
AAL: I sold the Feb ’21 $6 put for $.65.
Then in a few short days, I was able to close this trade out for less than $0.10 a contract for nearly a 90% return on investment
AAL: I will buy back my Feb ’21 $6 put for $.10 or less.
This allows me to identify the support and resistance levels of the stock to make a determination about how a charged fractal energy will impact the stocks new trend.
In this situation it’s all about the 52-week low and the Fractal Energy.
Because the 52-week low is a major physiological trading level for every investor and trader. And there are a lot of buyers at these levels, which can cause a stock to reverse direction with a lot of momentum.
And the Fractal Energy is telling me that buyers are piling into the stock as the values climb above 60.
Once I saw this I knew I had to get into the trade.
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TSLA is one of the most loved and hated stocks in the stock market.
And recently, TSLA was approved to join the S&P 500 and the stock has exploded.
But as the stock is climbing, the bears are starting to pile in more and more each day…
Now, I don’t want to be one of those bears that are shorting the stock or buying puts into huge levels of implied volatility.
No way, not for me… that’s just a pure gamble in my eyes.
Instead, I want to do what has been working for me, and that is selling credit spreads and leveraging the power of options to safely short TSLA.
And shorting the stock is not a trade I want to gamble on.
So, let me show you how to safely get short TSLA in two alternative ways than shorting the stock.
Just by trading options, it’s possible to be in a position to land 10x the amount of returns as a stock trader would.* Of course, I’m not saying every trade will be a 10X… there are no performance guarantees in the market.
Don’t take my word for it, find out how to return up to 100% ROI on a credit strategy in as little as a few days.*
Two Alternative Ways To Short TSLA
Recently, there has been awesome news for TSLA stock buyers… TSLA joined the lucrative S&P500!
And the news is driving excitement in TSLA every day, and traders are flocking to the name.
Traders are buzzing around this stock and it’s like a feeding frenzy.
So, how do you keep yourself safe when trading this out of control stock?
Let me teach you two of my go-to strategies that you can use to get on the right side of the trade and generate triple-digit returns.
Look how crazy this stock has been over the last week or two from it’s breakout pattern.
Two Bearish Option Spreads
The two bearish option spreads I would trade would be:
Credit Call Spread
With the increase of volatility, it’s usually not a great idea to purchase options when looking to take a bearish trade in a stock.
This is because the levels of implied volatility has increased past the point of being able to return a profit.
This is caused by traders looking to go short the stock in the options market and are driving the prices higher.
And from my experience, I would rather trade a credit spread to generate income instead of gambling on a stock.
As you can tell, if the stock goes up, down, or sideways – I can make profits on my trade! Plus, the best part about this strategy is that the higher the stock trades, the longer I can wait to sell my calls to take advantage of these greedy buyers!
And I won’t even begin to lose money until the stock runs another 40% higher!
So what I will want to keep an eye on is the Fractal Energy of TSLA.
From my experience, if this indicator continues to drop and TSLA stays above its upper Bollinger Band… then TSLA will have almost no choice but to come down and rest before it can take its next leg higher.
But what if I already have a position for TSLA and want to get short?
Well, you can do that too with options!
This strategy is called the Covered Call, and is a neutral to bearish strategy where a stockholder can sell calls against the position he currently has.
You see, many times people who own stocks actually want to bet against the stocks they own…
It’s actually very common in stock ownership and is a way to essentially create a dividend stream of revenue in a stock.
This works when you purchase a stock, and then sell OTM calls against this position, and as long as the stock doesn’t climb too high, you get to keep your credit and continue to hold onto the stock.
As you can tell, if you were to buy the 100 shares of TSLA and sell 1 call option, you would be able to make money if the stock went up, down, or sideways from here.
And the stock could fall as far as 15% before you’d even see a loss on your account.
Talk about a great way to generate extra income or betting on a stock trading lower without breaking a sweat.