The recent market swings shouldn’t come as a surprise to those of you who have been reading these complimentary articles in recent weeks.
During my daily updates to members, I’ve been all over the fact that a combination of April seasonality and the market’s tendency to transition into a choppy recovery following the outbreak of war would lead to the SPY and QQQ rising from their deep March lows in a series of fits and starts.
If you missed my most recent lesson on bullish April seasonality, you can find it here.
As far as the market’s post-war tendencies go, Marketwatch.com presented an interesting article this week about how closely the market is tracking the recovery period following another unpopular war, the Iraq war of 2003.
With this knowledge that markets were aligned for choppy-to-higher price action this week, my team and I decided to favor trade ideas that follow a strategy that continues to work, the details of which can be learned by reading the full, risk-free version of the complimentary article on our website.
Starting with this past week’s Bullseye Trade of the week, I was coming off a streak of 3 straight Bullseye ideas that traded powerfully in the direction that I alerted members to.
To keep the streak alive, I decided to choose Avis Budget Group (CAR) as my idea this week.
Here were the trade details:
As this next chart shows, the stock had been gathering bullish energy within a beautiful consolidation pattern prior to the start of this week’s trading.
Initially, my thesis that the stock would explode higher from this consolidation paid off as the stock jumped higher from this pattern, gaining 11% at the start of the week, exactly like my prior 3 big moving Bullseye Trades did.
In terms of the options activity, well, this next chart shows that the 22 Apr 2022 $280 Calls I recommended rose 100% on Monday.
From there, things got interesting in a way that presents me with an opportunity to teach you some VERY VALUABLE lessons.
The first lesson?
The market doesn’t owe you anything!
The market doesn’t care if a trade is working in your favor, and it would love nothing more than to take any profits you’ve been amassing in a trade away from you.
That’s why it is important for you as a trader to respect any signals the charts are giving you and take profits along the way.
This next, more detailed chart of CAR is a perfect example of why.
As you can see, CAR took a hit mid-week after some news came out overnight.
Folks, the potential for a rogue headline to take away your profits is ever-present in the world of trading.
That’s why the lesson here was for my members to take any profits they may have had when the stock rallied to the 2X ATR Keltner Band (this represented an extreme short-term move away from the center average) that I overlay on all of my charts FOR THIS EXACT REASON.
Southwestern Energy (SWN) was another great example from this week
Another great example of choosing the right setup for a trade idea and using the charts to take some profits off the table was the trade idea in Southwestern Energy (SWN) that The Professor, Mike Parks, presented to members.
Here were the trade details:
As the next chart shows, the idea was based on the same concept as was used for the previous example in CAR, which was to buy the stock in anticipation that it would spring higher from a beautiful bullish consolidation pattern.
In this example, a “triangle” consolidation pattern.
As you can see, the stock exploded higher from that pattern and ran another 5.8% to the post-Triangle target, which was also The Professor’s target.
But guess what, folks?
The options Mike looked at had an even better run of +40% before the underlying stock topped out at the triangle target shown above.
Bottom Line:
Remember, just when you start to get excited about a trade that may be going your way, the market is always ready to take those gains away. Just stay agile by tightening your stops and taking some profits at key technical levels along the way, and you’ll stay one step ahead of the market.
To YOUR Success!
1 Comments
thank for the insight.