I went three-for-three on yesterdays lotto longs in AAPL (+112%), GS (+217%) and NFLX (ONLY 220%). I sold NFLX waaaay too early.
The recent longs I took this week are looking good, particularly WDAY, YELP, ZLC and FSLR.
One technical approach I delve into on my blog is volume profile, and how to use it to find *fast* longs. In other words, anticipating the explosive breakouts.
If you are a student of the charts, you realize that the common belief among technicians is that prices have memory. Prices consolidate at levels that they remember and travel quickly through levels they do not.
While we’ve executed this approach successfully in multiple longs over the last month, GRPN, IQNT, MCP, RBCN, SLV, FSLR… I am going to set up another trade now that I have a few more eyes reading.
Today’s Trade: RKUS
This stock did well off its IPO, but has been a turd all year. What I particularly like about this stock is that last year, when it took out its IPO high, it traveled from $14 to $20 in a week, leaving very little time spent and volume traded at those prices.
Fast forward to this year, this stock made the same move down, but gapped down through that same range after earnings in May.
Let’s take the same chart, and add up all the volume traded at their respective prices…
The profile is green off to the right of prices. It illustrates a steep slope and a “pocket” which acts as a vacuum, up to the next known reference point…which is $17 for this stock.
I bought August 15 calls today. You might prefer to just trade the stock. Or you might slap a buy stop on this stock at $14. Either way, watch and follow this stock in the next few weeks as it makes its next move.
OA
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OA when you buy weeklies for the the friday lottos, do you buy the options exp today or next weeks?
They’re called lots because if he is wrong he loses the entire premium. So today’s.
Lottos*
If I use the term “Lotto Friday” then the specific strategy is buying an OTM call, usually on Wed or Thurs that expires Friday of the same week.
I’m 50/50 win/loss, but my gains far exceed my losses.
Plus, its fun as shit.
Thanks for the response. I killed the NFLX trade on your heads up.
You sir, are my new idol.
Flattered, thanks
“Plus, its fun as shit”
Hahaha
appreciate your expertise in this area. Have only really traded options with a stock I know well: SIRI – and have done well buying calls at the bottom of the upwards channel. Have been taking nice gains on July 3.50 calls lately.
Going to be closely following your commentary from here on and thinking of taking this (RKUS) as my first venture away from familiar territory – thanks much!
Thanks OA ! I look profit FSLR, and holding MELI for longer term.
Love that $RKUS chart
Closed all long July positions at ~ 600% for the weeklys and 400% for monthy .
Bought 300 DIA 154 puts for this afternoon…..summer Friday afternoons can get real silly around 14:00 .
Thank you BA , out at .21~.23 from .075 .
That is just nasty.
Awesome work
Shit, NFLX calls now rounding 500%…
What are your thoughts on STP. Still going to $1.25?
Yep, should hit it today.
I got GMCR this morning. What is your price target ? Thanks!
Tentatively $75
Legit.
the house of cards continues, throw a dart . i have some short term bonds that r warning… gold is gold. im looking at lumber,copper and shipping. they are painting a picture. its kinda a picasso but id rather have a michael angelo .
OA – those Aug 15 calls seem pretty expensive, no? not too expensive?
So…take a snapshot of the relative range of Implied Volatility…it is right in the middle. Not expensive, but not cheap either.
Last couple of days selling volume GMCR are huge,,, doesn’t it bother you? Thanks.
It encourages me that this stock has tried to go down three straight days, and failed. To me, the volume looks more like accumulation.
A rejection of new lows typically means look out above.
Thanks OA ! I’m holding tight.
OA, $FSLR chart seems like it could catch fire again for a short term play. Thoughts?
I am uber bullish here. One of my top picks for the rest of the year.
Agreed. I have a longer dated leap call options on FSLR that I keep adding to on every weakness. I also play short term bounces like this one coming up. Getting me some front month calls today. Fingers crossed.
any thoughts on QSII ? built a huge base over the past year after a huge drop seems to be breaking out now 10% float short
As a rule of thumb, I don’t trade into a breakout like this.
If I miss it, I will wait to buy a re-test of the old range.
thx oa! btw. are you going to stop your other service and concentrate on the new one or you gonna run both at the same time?..
Two separate. My existing service is my fifth child, or second wifey. It stays.
1. i have been dreaming about your service for at least a year now, im so glad about that
2. would love your thoughts on FB here. im ATM for the July calls
Had I been long, I would have targeted this area.
Inside day today, see which way it breaks. That’s all I got…sorry.
Any thoughts on PBR? Stock, not the beer. If the stock is anything like the beer, I’ll stay away.
Worth a try for a longer term time horizon.
OA, you still holding NUGT?? Thought on it?
I’m out. Still in USLV.
OA, On your study of volumn pockets, looking at $RKUS, what if there had been larger buy volume 1 year prior to the gap down, does a longer time lapse affect the price memory? Thanks for all your work, looking forward to the service.
rkus…long common…love those open range volume pockets…fast and furious when they hit