Finding moves like this week after week can build a heck of a portfolio!
Some weeks, I’ll have multiple setups transpire when the market is cooperating.
Other weeks, when the market has stalled, I’ll preserve my resources.
I’ve been watching semiconductor stock Micron Technology (MU) for a few weeks now, and it’s been ultra-reactive to an area of support I’ve identified.
I know my hand drawn analysis is done correctly when price is reactive to the area(s) I identify as either support or resistance.
Micron has been hovering at support now for a full six weeks before it finally broke.
The great part of the way I do my analysis is that I know when something is setting up, usually several weeks in advance.
So, all I have to do is check in on it at the end of the week.
Well, I opened up my favorite charting platform this past weekend while sipping my coffee Saturday morning and found that Micron had finally broken out!
That triggered the opportunity to sell Micron for a potential short opportunity.
The Short Idea
As I’ve shared with my readers in the past, I’m not one to openly short a position.
I gravitate towards the options market and simply purchase a put option instead.
Let’s check out the chart setup…
As the image suggests, there’s approximately a 12% return to be had in the price action.
I’d look at the MU Sept. 16, 2022, expiration $60 strike put option (MU220916P00060000), and I’d like to pay no more than approximately $5 per contract.
Why the options market? Well, there are two main reasons …
First, limited risk. And second, leveraged upside.
This idea sounds like a win-win to me.
After all, even if I lose, I know my risk before I even get started.
Join Us This Afternoon
Before I go, I want to personally invite you to a special presentation with my colleague and expert stock trader Ross Givens.
Ross’s premium Alpha Stocks research service focuses on only the very best stock trading opportunities — both on the long side as stocks rise and on the short side when markets are crashing.
He recently recorded a huge winning trade on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged…
As well as a gain of over 21% in just 15 days in Permian Basin Royalty Trust (PBT) as that stock broke out of its range.
Rules to Live By
“Be steady and well-ordered in your life so that you can be fierce and original in your work.” Gustave Flaubert
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.