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It’s a trader’s market out there. After being in the doldrums for most of the year, market optimism has returned. Many are wondering if the bottom has been put in, and this has led to money being put to work again on the long side by large traders, as indicated by rising stock prices. However, this could just be a correction. History tells us that the biggest bounces come in a bear market.

All this means that there are some fantastic opportunities both to the long and short side for short-term active traders. On Monday, in 360 Wallstreet, our new All-Star Chat Room, I broke down this short trade idea in MU LIVE. Here’s what happened to the put options:

If you missed it, Click HERE for the Replay to see expert LIVE analysis. MU – Trade – Raging Bull Events

For a limited time 360 Wallstreet is available at 0 cost to subscribers. Sign up here for our best trade Ideas and training sessions Daily.

Here’s How I Traded It:

I wouldn’t have been in this trade if it wasn’t for the High Octane Scanner. It’s my main Idea generation tool. Get yours today and become an Alpha trader. Get a Full Month Trial for only $99.

You’re only as good as the stocks you trade. No matter how good your trading skills or stock analysis, if you’re not in the right stocks at the right time, you’re going to struggle. 

I’ve been working with my programmers here at Raging Bull to develop an improved scanner for my strategies. Here it is in action:

On Monday, it picked up a 13/30 hourly crossover in Micron Techonolgy (MU). Now I had a bunch of trading signals, but I’ve been following MU for years, so am familiar with the stock. When the daily chart and fundamentals line up with this crossover signal, I believe there is an increased likelihood that the trade will work in my favor.

So the Scanner issued a bearish signal. In the back of my mind, I know that Nancy Pelosi caused all kinds of trouble inTaiwan with China. China has Taiwan surrounded. This could have some catastrophic consequences for the chip and semiconductor industries. So the fundamentals are bearish, MU is starting to move lower, so the technicals are in my favor, then my favorite Trading Strategy scanner gives me a signal. BOOM, that’s when it’s time for me to pull the trigger!

I decided to buy the $63 puts expiring August 26 for $2.80. MU was trading at around $62 at the time. I expected a break of the $60 level or lower, and that’s exactly what we got the very next day. MU traded below $58, and the puts I bought for $2.80 traded over $5, and I sold them for $4.30. That’s over 50% in 2 days. Here’s how I traded it:

Trades don’t come much cleaner than that. Don’t miss my next great trade Idea. Sign up to 360 Wallstreet, which is 0 cost for a Limited time. Join me in the chat room daily and for LIVE education sessions every Monday at 11am.

I wouldn’t have been in this trade if it wasn’t for the High Octane Scanner. It’s my main Idea generation tool. Get yours today and become an Alpha trader

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Author:
Jeff Bishop

One of the best traders anywhere, over the past 20 years Jeff’s made multi-millions trading stocks, ETFs, and options. He is renowned as an incredible trader with a deep insight and a sensitive pulse on the markets and the economy. Jeff Bishop is CEO and Co-Founder of RagingBull.com.

Even greater than his prowess as a trader is his skill and passion in teaching others how to trade and rake in profits while managing risk.

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1 Comments

  1. Nope, didn’t miss the MU trade. I got in at the opening of Monday, and paid $891 for 2 $62.5 puts.

    stock went nowhere but up, and I finally sold at 10:30 on Tuesday, for $471. LOSING $420.

    I must have a different MU from yours, because my chart looks nothing like yours.

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