Have you ever noticed a stock explode higher…
Then you pull up its competitor or peer, and notice it’s up as well?
I mean right now, we’re seeing this price action almost every day — and it makes sense. You see, when elite traders see a stock go up on news…
They automatically think, “I missed out, but what other stocks can I get into that are within the group?”
I mean you’ve probably seen them in EV and MJ stocks recently.
Today, I want to show you why it’s important to understand what sympathy plays are and how to uncover them on your own.
A sympathy play is one in which an indirect catalyst affects a stock. For example, we’ve seen how cannabis stocks took off after it was announced the POTUS will begin the transition process to Biden.
We’ve seen work from home stocks get smacked down after vaccine news hit the wire.
Makes sense so far?
So the key to identifying these plays is to identify a leader or peers in the group.
There are tools to screen for these plays, and Finviz is one that’s free to use to identify these plays. Let me show you how to actually uncover these plays.
Take a look at the run in Bitcoin recently.
Now, there are stocks that actually have exposure to Bitcoin. So these stocks actually move in sympathy with Bitcoin. In other words, if BTCUSD prices run higher, chances are these Bitcoin- and blockchain-related stocks follow suit.
So let me show you how a sympathy play works with a real-money trade I took.
On Monday at 10:07 AM ET, I sent this out to Fast 5 Trades subscribers.
This week’s trade is RIOT.
It’s a shortened Thanksgiving week, which usually means there is a trend for the week and some outsized moves in small cap land.
This year it looks to be blockchain/crypto to start the week and RIOT is right in the middle of that space.
Buy Zone: Under $7.20
Profit Zone: Upper $7’s to start
Stop Zone: Lower $6.00’s
My Action: I bought 2k RIOT at 7.04.
I was able to get in at $7.04, and the stock closed at $7.23. With this trade, I wasn’t looking to be in for too long, nor was I looking to hit a home run. The way these small-cap stocks move, it’s important to remain nimble, in my opinion.
That said, on Tuesday in the pre-market…
I actually used the gap up to lock in my profits.*
Here’s what subscribers saw in their inbox at 7:15 AM ET.
The bitcoin/blockchain stocks are moving higher again this morning as bitcoin surges higher!
RIOT is up at $7.50 and I sold my shares for a nice win.
Now, there are plenty of sympathy plays in this market, and if you can spot them, you’ll be able to uncover underlying trends in the market.
I get it, in this environment, it’s hard to pick up on what’s moving next.
You’ll learn all about how I time the market to near perfection… and uncover “hidden” bull markets.
Given the way the market has been acting, I urge you to attend this because I believe this session can truly make you a better trader right now.