Man what a wacky market out there today…

Stocks are bouncing all over the place, and that’s why I like to stick with trading momentum stocks.

Now, when it comes to trading fast-moving stocks…

I believe it’s important to focus on one overall sector.

There’s one that comes to mind right now — cannabis.

This sector has been beaten down and with a large looming catalyst, it may catch a pop soon.

Today, I want to show you some cannabis stocks on my radar, and what I’m watching for.

 

Cannabis Stocks On My Radar

 

Cannabis stocks have been beaten down recently, but I think the tides can turn very soon with the upcoming election.

Next month, there’s going to be some big events, and the Connecticut primaries will be held early in August.

Not only that, but the 2020 Democratic National Convention, as well as the 2020 Republican National Convention, will be held next month.

I believe one of the many talking points will be cannabis legalization.

With Biden leading the current POTUS in polls right now, it may cause some traders to pile into cannabis stocks in anticipation.

Who really knows.

One thing I do know is these stocks can move, if a catalyst hits… and some cannabis stocks I want to keep on my radar include: HEXO Inc. (HEXO), Canopy Growth (CGC), Aurora Cannabis (ACB), and Tilray (TLRY).

Now, these stocks are all heavily-shorted, which actually is attractive to me.

You see, if a positive catalyst actually hits and these stocks start to run higher…

The shorts may be squeezed, which can push the cannabis sector higher.

Right now, the short interest for these names are:

  • TLRY with 23.71%
  • ACB with 19.03%
  • HEXO with 11.62%
  • CGC with 23.58% 

I wouldn’t be surprised if these stocks gain momentum very soon headed into the election events.

That’s why I actually bought shares of TLRY on Tuesday.

On the hourly chart, TLRY is forming a bull flag pattern.

 

Source: StockCharts

 

This is one of my favorite patterns to trade because typically, when I notice this pattern… there’s a high chance, in my opinion, the stock could break out and run higher.

On the daily chart, TLRY has been consolidating and just bounced off a key support level right under $7.

 

Source: StockCharts

 

That signals to me there’s demand for the stock there.

Right now, I’m going to keep on eye on these cannabis stocks… and see whether my momentum patterns pop up in these names.

I’ll be sure to update subscribers about anything new I see in the names.

Now, if you want to learn more about my techniques to hunt down momentum stocks… I wrote down all of my thoughts and my number 1 edge in my new eBook Momentum Hunter.

Click here to claim your free copy.

After reading it, you may be shocked at how much easier trading can be if you just focus on the setups and techniques I lay out in the eBook.

 

WE MAY HOLD SECURITIES DISCUSSED. RagingBull has not been paid directly or indirectly by the issuer of any security mentioned in the Services. However, Ragingbull.com, LLC, its owners, and its employees may purchase, sell, or hold long or short positions in securities of the companies mentioned in this communication.

 

Author: Jason Bond

Jason taught himself to trade while working as a full-time gym teacher; his trading profits grew eventually allowed him to free himself of over $250,000 in student loans!

Now a multimillionaire and a highly skilled trader and trading coach, Over 30,000 people credit Jason with teaching them how to trade and find profitable trades. Jason specializes in both swing trades and in selling options using spread trades, which balance the risk of selling options. Jason is Co-Founder of RagingBull.com and the RagingBull.com Foundation which donates trading profits to charity. So far the foundation donated over $600,000 to charity.

 

Tomorrow is a new trading week…

And you better believe I’ll be looking for sucker bets.

Today, I want to point out to you one sucker bet that looks interesting to me…

It came up on my sucker bet scanner on Thursday.

I mean this bet was so wild… that I believe it’s going to lose value really quickly.

The trade was in Netflix (NFLX) puts, and based on the math…

The chances of the trader who placed this bet are slim to none.

So what specific trade did my scanner pick up on…

And how can traders play this?

 

Sucker Bet Detected In NFLX

 

Take a look at the trade in NFLX that went off on Thursday afternoon.

The stock was trading at $478.45 at the time…

And someone purchased the $375 puts expiring on July 17.

 

 

If you look at the scanner, there’s less than a 9.13% chance those options expire in the money.

That trader would need NFLX to drop by more than 20% by the expiration date… just to break-even.

Those options closed at $0.63… and there is a way to take advantage of that sucker bet.

You see, whoever takes the other side of that trade would actually have a 90%+ chance of collecting all the options premium.

However, if you know me, I’m really not a fan of naked selling options.

You see, even though the odds of NFLX dropping by more than 20% in about 2 weeks is slim… there is a chance.

The last thing a trader would want is for NFLX to drop significantly and losing more than they expect, in my opinion.

So one way to play the sucker’s bet is to hedge the position.

How?

Well, by selling the $375 puts expiring on July 17… and buy lower strike price puts.

It all depends on your outlook, but traders can go either $5 wide or $10 wide.

In other words, one could sell the $375 puts and either buy the $370 puts or $365 puts… at least that’s how I would look to take advantage of a sucker’s bet.

The thing is… NFLX is expected to report earnings on July 16, so maybe this trader is looking for a big miss in the numbers.

Can it happen?

Sure.

However, if I take sucker bets like that…

I tend to look to close out before the catalyst event, it’s just safer in my opinion.

I’m going to keep an eye on NFLX this week, and see if there are other sucker bets that pop up on my scanner.

Now, if you want to learn more about my options trading strategy and the “bookie” advantage…

Then check out my latest eBook, Wall Street Bookie.

Grab your copy here.

Author: Jason Bond

Jason taught himself to trade while working as a full-time gym teacher; his trading profits grew eventually allowed him to free himself of over $250,000 in student loans!

Now a multimillionaire and a highly skilled trader and trading coach, Over 30,000 people credit Jason with teaching them how to trade and find profitable trades. Jason specializes in both swing trades and in selling options using spread trades, which balance the risk of selling options. Jason is Co-Founder of RagingBull.com and the RagingBull.com Foundation which donates trading profits to charity. So far the foundation donated over $600,000 to charity.

With so much action in the market, it often gets hard to filter out the noise…

And find stocks to trade.

Today, I want to point out one momentum stock that I just uncovered.

It’s one that I want to keep on my watch.

You see, I’m noticing a bullish pattern in the stock right now…

And it’s also heavily shorted.

That means any positive catalyst could cause this stock to pop.

So what’s the ticker and the pattern I’m watching?

 

Why I’m Keeping An Eye On GOGO

 

Gogo Inc. (GOGO) caught a pop last week after the company announced that its business was showing a potential recovery.

If you don’t know, GOGO is the leading provider of broadband connectivity for airlines.

It hit 3,000 daily flights and the president mentioned there are several positive trends in the work right now.

With a catalyst in the works, another news event could cause GOGO to get to recent highs.

Here’s a look at what the stock is going on the daily chart.

 

Source: StockCharts

 

With this pattern, GOGO broke above a key Fibonacci retracement level, and if it gets above the $3.20 – $3.25 area… I believe the $4 level may be in play.

Now, on the hourly chart, GOGO is forming a bull flag / pennant pattern.

 

Source: StockCharts

 

On Thursday, it closed within that consolidation area, and I wouldn’t be surprised if it breaks out soon.

You see, GOGO only has 52.07M shares floating.

Of those 52.07M shares floating, 45.73% are short.

In other words, it’s a “hated” name on the street.

That’s why this play is so interesting to me.

With a high short interest, that can actually cause a potential squeeze. Since this would be considered a low float stock, in my opinion, if the demand kicks up…

There’s not a whole lot of supply.

If you remember from an economics class, if demand exceeds supply… prices go up.

Now, since there is also a high short interest, if the stock actually runs higher…

The shorts may want to cover. In turn, that further increases the demand for the stock… and the price should go up as well.

This actually creates a scenario in which GOGO can pop fairly quickly, in my opinion.

GOGO shares are up 18.32% over the last month, and 64.02% over the last quarter… and it can continue to build that momentum off the backs of the recent news.

Will GOGO provide another update soon?

Who knows.

But the patterns tell me this should be on my watchlist.

Now, if you want to learn more about my “part-time” momentum trading strategy… and my techniques to hunt down stocks poised to move…

Check out my training workshop here.

Author: Jason Bond

Jason taught himself to trade while working as a full-time gym teacher; his trading profits grew eventually allowed him to free himself of over $250,000 in student loans!

Now a multimillionaire and a highly skilled trader and trading coach, Over 30,000 people credit Jason with teaching them how to trade and find profitable trades. Jason specializes in both swing trades and in selling options using spread trades, which balance the risk of selling options. Jason is Co-Founder of RagingBull.com and the RagingBull.com Foundation which donates trading profits to charity. So far the foundation donated over $600,000 to charity.

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