Last Friday, Bitcoin had a major bounce, and this follow-through continued over the weekend. MARA, a bitcoin mining and blockchain-related stock broke out of its consolidation range in pre-market, and I expected it to go higher given how oversold it was. In fact, this was my favorite setup in the entire market, which is why I made it my Bullseye trade of the week!

After analyzing the market over the previous week and going through charts over the weekend, I send out my favorite trade setup to subscribers. This week MARA ticked all the boxes and worked almost immediately, with the options up over 100% in under 4 days.

The technicals lined up, and from my call on Monday MARA ran from $25 on the open to $31.44 on Thursday. The $23 options I was looking at went up over 100% over this period.

I see Bitcoin as the ultimate Risk-On asset and as a barometer of risk sentiment for the entire market. With Bitcoin bouncing back hard last Friday and over the weekend, I expected some risk-on sentiment this week, and that is exactly what happened before the selloff yesterday afternoon. 

These blockchain-related stocks had been significantly beaten down over the last couple of months, and the renewed strength in Bitcoin presented a great buying opportunity. 

Here Was My Note To Bullseye Subscribers Sent Out on Monday Morning:

MARA

As I look at sectors I feel have a good possibility of rebounding, I am drawn to the overlooked crypto stocks right now. So, I went knocking on the door of my buddy, and fellow RagingBull trainer, Jake McCarthy.  

We talked, and I jotted a few ideas down that he likes a lot right now. He is our expert on all things crypto, so I wanted to hear his thoughts before I chose a stock.  

Pro tip: Always surround yourself with traders who are smarter than you in different areas!

From his short-list, my favorite right now is MARA. 

Looking at the stock chart, you can see this has been in a nasty downtrend for the last 3 months. 

If you have been watching crypto at all lately you will see that the market has bounced strongly yet the stocks in the sector have lagged.  

And looking at the charts even closer, there was a double bottom followed by a pennant breakout to the upside.  

These two combo patterns are showing the bulls are here to stay, so therefore, I am betting this will be a “catch up week” for those stocks and MARA could be a leader there.

Now, if I am wrong I think Bitcoin will drop under $36k and MARA will drop under $20. I want to set my stop loss if either of those things happens.  

On the upside, I think MARA can trade near $28 on the upside as my first goal and $30 as the 2nd target.  

Why are these my target levels?  

Those correspond to the upper limits of the Keltner channels right now. 

Also, if you are still wondering about some previous Bullseye ideas… I still really like DPZ and DWAC.  

Don’t take stocks off your radar just because the week is over. Stocks tend to move in waves for several weeks at a time.

My Trade Plan:

• Stop: Under $20
• Target 1: $28
• Target 2: $30

My Trade #1 (spicy):

• Buy MARA calls
• Expiration: Feb 18 2022
• Strike: $23
• Price: near $2.20

Now, here’s How The Trade Idea Played Out:

Looking at the chart, these MARA calls traded from around $3.30 on Monday and traded to a high of $8.40, well over 100%. The read on the trade and idea were perfect. Unfortunately, I did not get a fill on my $2.20 orders. Sometimes it pays to be more aggressive, but I always focus on being disciplined.

So, now that this trade idea has played out, I’ll be scouring the markets for the next bullseye trade for Monday.

Bottom Line

The Bullseye Trade is my favorite trading setup for the coming week/few weeks. After scouring charts over the weekend, and my screen time from the week prior, I come up with the best trading idea according to my criteria.                              

This week due to the renewed strength in Bitcoin, after a significant slump, my pick was MARA, a Bitcoin miner, and Blockchain-related company. MARA is in fact Jake McCarthy’s, our resident Crypto expert’s, favorite stock. The technicals lined up, and from my call on Monday MARA ran from $25 on the open to $31.44 on Thursday. The $23 options went up over 100% over this period. 

They don’t all work this well, but boy that was a great call. I’m hard at work now getting ready for this coming Monday’s Bullseye Trade Idea!