Are Semi's rotating into favor? If so which stocks? | Pat Mullaly, CMT |Active Trading Strategies

Are Semi's rotating into favor? If so which stocks? | Pat Mullaly, CMT |Active Trading Strategies

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Well. Welcome everyone this, is active. Trading strategies my name is Pat Mullaly, it is the, 15th, the Ides of, October, and. Some. Interesting things happening today's markets, are strong some, other things we're going to talk about we'll look at some trades let's. Get into it. Whoops. Remember. That everything we're doing here is for, educational, purposes only and, I. Got to move the back button. Too. Many taps my. Apologies, for that remember, that that. Anything. That we talk about with options options, are not necessarily suitable, for all investors as, special risks are and hearing to options trading trading. Futures and Forex is not. Suitable. For everyone remember. That we're going to look at actual symbols, today that does not mean that we are making. Any kind of recommendation, and those recommendations or. Those. Trades. Are going to be. Those. Those. Trades are. Not. An indication. Of any kind of suitability of that, stock remember, that all investing, involves risk including the risk of loss any investment, decision you make in your self-directed account, is solely your responsibility and. Remember. That. Zero. Commission applies to online. U.s., exchange listed, stocks ETFs option. Trades and option, trades have sixty-five cents per options, contract. Fee and that applies to all option, trades. No. Soliciting, no photography no part of this presentation made copy recorded a rebroadcast without, the prior written consent of TD Ameritrade, Delta, Gamma Vega theta that, is option, sensitivity, changes in price time and volatility those are the three things we, really, want to consider. As far as strategy, and, as far as directional. Risk in the market so let's move, on out to the. TD. Ameritrade, site and start talking about today. So again, the learning option today is or. Their learning objective, excuse me today is that we want to, define. In, by the end hopefully you'll have learned to find those possible, changes, in, in. The, markets, and then, the agenda, is to look at the market for, for. Strength. In certain groups so. We're going to look at under. Loved areas. Maybe because, of trade deals we're, going to then put on some some. Pre earnings, trades were in the midst of earnings season and maybe, that's why we're seeing what. We're seeing today if we come back over here to the chart and. Take. A look at. Today's. Action, so today's action, is pretty strong when we look at the candlestick. Here we look over here it's about 31, points, to the upside a little over a percent, to, the upside, let's. Zoom in on this and. I'll. Pop over here and, hopefully. It'll zoom, if. We look at the, the. Indication. Down here with the. Conviction. Indicator, up. One percent conviction indicators, sitting up around 78%. That's. Actually. Maybe a little bit better than typical for just being up 1% on the, on, the, day so. So. What we want to do with, that what are we going to do with that kind of news well, if we. Look. At the. Overall trend remember we talked about this, last.

Week Long-term. Trend is up intermediate-term, trend is up short-term trend is up but up against resistance so, when we look at that resistance, area up, in here that. Resistance. Area is. You, know that's those. All-time. Highs up in here we're just a few points, off of that all-time, high and so. Expect. Some resistance, there but we do have some you. Know some nascent. Strength. Let's say in some other areas, and we'll talk about that right, now so let's take a look at something here this is the. Already. Move to it okay so this is the. Sox index, that we're looking at here Sox, index. Is the. Semiconductor, index. And when we talked about something, that's unloved, to something that might be changing their their. The look, their structure, of their trend Sox, index, may. Just provide. That for us what's the Sox index, it's the Philadelphia, semiconductor. Index symbol, s o X. Semiconductor. Index, and we're, seeing some some. Strength come in here if we, look at the look. At the trend. We. Can see that trend fairly. Strong to the upside higher higher, lows but, we've had this. Tendency. For, price to struggle. Up in the area where it's adding, in today so we're seeing some strength, so what might you do with. Something like this if you see strength coming in here, to. To. The semiconductor, index. Maybe. Some, of their stocks that, are in. That index maybe some of those are starting to break to, the upside and they may not necessarily be all the names that. We've were, looking, at in previous. Years right they may not be the, the, microns, and the AMD's and and the Intel's and those types of things they could be we're going to look at some. Some. Stuff. That's been on the radar. And. You've heard about it you, know in various areas but are very from various financial people but. We're gonna take a look at some of those today the. Important thing is. So. We have relative, strength we talked about this yesterday. In the in. My class yesterday and one, of the things to notice here is. We're. Seeing the, semiconductor. Index break out with, the assembly connector index relative. Strength breaking, out to the upside while. Price is. Sitting. Here. That, might be a sign of again. That that early strength in this. In, this sector, and so, inside of this sector of course there's other industry, groups inside. Of the sector or. Other types, of you, know. Some. Semiconductor, companies we're not going to worry too much about that we're going to move forward here and we're going to take a look at up materials. We. Look at applied materials, again. Looks very similar to the, semiconductor. Index. We look at the relative. Strength down in here. And. We. Have relative. Strength again. Moving from the, lower left to the upper right. Strong. They're making, new highs and relative strength eking. Out today, a new, high in applied material, so somebody, might look. At that as a possible, trade. When we look at the. Look. At the earnings here, down, here you can see this. So. I can get that to pop up. We have earnings coming out around the middle of. November. In the middle of November not necessarily, close. But. Again only gives us a little bit of time so if you're looking at this breakout, but you're worried about earnings, out, in the future what we still have a month so you could choose a short term swing trade an active. Trade since this is active, strategy, trading strategies, they just pick, a short, term swing trade looking for the breakout to, rally and then maybe to pull back or you, could choose a some. Kind of a option. Strategy, where you're selling some premium bringing, that premium, in expecting, price to, run and maybe you, know if, it decides it wants to run that's some anticipation of, strength to come and that's something else to think about. One. Of the things that. That. You're gonna learn about, Said's, semiconductor. Index. Semiconductors. When. They have a tenth when they have a pullback, those, pull backs could last anywhere, from. Four. Months to, six, months and then they start to move out, again and maybe we're starting to see that they've been you, know really kind of just drifting. Sideways some, have been coming down for, the last several, months because. Of trade talks now, the anticipation. That those trade talks may you. Know, you. Know then we will come together on that trade we'll see what happens there but, that may, be a reason, to recognize. Change people, are not, very, they're very good at recognizing change. We, can see it well that looks like that's changing, we say and, then what do we do we, don't do anything right and then we say hindsight. Bias we, say yep I knew, I was right so, you're gonna have to take action and the way we take action is to define these levels and the, way we take action has to be along your your, guidelines, do, you do it with options, do. You do it with stock do you do it with a combination, of options.

And Stocks do, you create. Stock, using options all different types of choices that you might have but you need to figure out what, those are prior, to that right, now what do we see we, see Applied. Materials uptrend. We see relative strengths strong, if. We use the. Market forecast or we use RSI, we, can see that the market forecast, is. Drawing. A. Drawing. A. Bit. Of a bullish. Bias here where we're seeing, the green intermediate-term. Line move up into the into. The reversal. Zone for, a something. That's breaking out remember this, about technical, analysis, if, something, is in, the revert in the case of market forecasts which basically is a stochastic. And. Shorter. Term near near-term. Like. Weekly type our daily, type. Versus. Monthly. Type of. Duration. Between the green line and the blue line if they're, starting to break to the upside and, we get price breaking. To the upside. Like. We're seeing here that. Often times that, that Bitove, overbought. What, some people might call going. Into the mace wound but, we still saw as price, as. The, as the. Market, forecast went overbought we, saw price continued. To rally to the upside we'll, look for some, similarities, in that. To. You know going forward we'll see what happens if it doesn't pan out and it breaks down well, guess what somebody, might say well we have this zone of. Support. What, sold resistance. Becomes new support, so, if I draw that red line across there what sold resistance, becomes new support, let, me try this again, not. Gonna happen. Hey. Look at that. What's. Old resistance, become new support then maybe perhaps will will. See. That support. Line hold right around 52. That 52, zone okay. Let's move on to the. Next one notice, that these all look very similar we're. Going to look at we're. Going to look at one hour, - that don't look quite the same but, again here, we have the. This. Is I pH I so. Another. Semi conductor that's, out there that people are. Obviously. Looking, at because it's been up trending it hasn't, been down trending, are coming, out of a really strong downtrend like, those big, glamour, names. Those those those, names, we always heard in the news you know a couple years ago the Nvidia, is the microns, the AMD's we, didn't get much of a downtrend out of this one it's been in a strong uptrend and we, would look at this uptrend and then. You know price first and, the. The. Jaggedness. If you will of this of the of. The. Price bars it's, not really getting any we're not seeing anything outrageous in, these price bars and. Then if we also consider. This. Possible, flat base or a possible. Cup, building. Up and here a break above that line there would, create that. Cup. With a high handle, or a cup without a handle something to.

That Nature so, with, this one somebody might consider. Doing you. Know some kind of an options trade this. One however has, the. Earnings, that. Are coming out fairly. Closely. Not. To where we're. Trading right now so about the 29th, of the month so, we do have earnings coming out that's, the the. One thing about earnings, season in your guidelines, you need to define what. You're going to do are you going to take short term trades ahead of earning, let, that volatility, implied. Volatility, build-up it's. Got a couple of weeks implied volatilities, probably already high we'll take a look at that we'll, look to make some kind of a, trade. On this maybe an options trade but. Again nothing, radically. Different than what we're seeing in the industry group, and the. Old theory, is that, with. The, industry, group being. Kind. Of the. Tide. That, lived those, buying high and looking to sell higher right or being bullish high and looking to, close. Out those positions higher and. The the. Idea behind that some people said why would you do that why would you buy when, this things up this. Far well the. Answer to that is somebody. May have said that. Right. In here right they may have said before. You could, see. What was happening on the right side of the chart back, you, know you're, as only as good as the right edge of the chart and looking backwards, and understanding. How price moves they, might have said well you know that's at an all-time high or whatever happened to be oh well, now it's, at another all-time high right and so, when it's up here at 64, somebody might have said boy I wish I'd bought it when it was cheap down here at 49, or they might have said I wish I'd have bought it down here at. 35. When, it was cheaper right and so you never really know getting, hung up on whether, it can't go any higher or not is oftentimes. A. Fool's. Errand. Is the, same thing as some people think it's a fool's errand to buy high, but we. Do have, other. Stocks, that, have been pulling back now this doesn't look very simp. Or doesn't look the same but. We, still have an uptrending. 200-day. Moving average. We have a. Relative. Strength. That. Really. Is just. Now, starting to revive, itself to the upside so we're seeing price, in. It. Break to the upside breaking. Above. This. Dotted line I have here a price over the last couple of days breaking. Above that we have the moving average 200-day, moving average, sitting, higher, we've. Got the market forecast, as well, in. Getting. Into the, overbought. Zone and we have that, bit of a hook to the upside so there, may be an opportunity, here looking, for. Service. Now to, start to move to the upside let's. Take a look at Corvo. This. Is one that's been on a lot of people's list doesn't, look much, different than. What we've looked at a little bit wider range in here and if, we look at price pattern, and, we look at price and we. Define. The. Possible, move. Between. The. High of the ascending. Triangle that we see here let me draw that in. The. High of the ascending triangle and the base of the low of the ascending triangle forming. This higher, lows and similar. Highs we. Look at 77. Down, to around 60. So that's about a $17. Possible, move in this, so we're trading it's at 60, at 79, now so, seeing it move, another. $17. That's, going to take it into that 84 85, area probably, expect, some resistance.

Coming In there but oftentimes. You're going to see maybe, a little bit of a resistance in that zone and then a push to a hundred, and then if we can get above a hundred maybe, a push to 110, these, are things historically, that happens with. Industry. Or stocks in certain industry groups that are that. Are strong so we'll watch, we'll. Watch for Corvo, again. Breaking very strongly to the upside, today. You. Know the volume, don't. Have a don't have a number on the volume today but the volume is better than yesterday we'd. Like to see it better. Than say the last 10 days but again, this. Is a breakout right, this is a breakout, in on a breakout, when. And, I'm going to go back. To. The market on, a breakout when, the markets at resistance, we, may see price, coming back in just, a skosh. Let, me do. What I should have done a long time ago and that say hello to everyone so we've got Cathy and Gary. Ricardo. Ali is in, the room, got, some, some. Discussions. Going on with Ali out there on Twitter again. Please follow. Us on Twitter follow, me on Twitter more importantly, but. Everybody else here too a lot of great folks here but you can follow us on Twitter at Pima, Lally underscore. TDA. And. That would be great if you did that. As. Well as. Down. Below the. The, on, youtube, down below where there's the screen that you're looking at there's, a subscribe, a like and a share button, please, subscribe, and like and share, and. If, you don't like it shared somebody you don't like I think, that's funny. Alright let's move. On to see if I've got some chats. In here I do have the chats over here on a screen. That I can see. Hello. Joey and Sylvia, as well. So. Ally says Applied. Materials aim at intermediate, indicator, strength getting, established though, volume, activities, may, not be high enough and that's another, thing if that's part of your guidelines, you need to take that into account and why my volume, strengths not be high.

Enough Because. It may be sitting right at that resistance, area and that may be an indication, that, people. Aren't willing to push by that so we're going to see how much demand is built up because, when we look at these, charts. And. We'll go back to Applied Materials when we look at these charts. The. The, the. Question. Before. You really. Do anything is to. Understand, where these levels, are number one and then, and then, as we look into these levels are we seeing. Demand. Come, in in other words where's demand typically come in demand. Typically comes in at a, support, area 200-day. Moving average, and price, now, the 200-day, moving average, is tilted up but, we still bounce demand, still coming in here demand. Came, in a little bit sooner didn't make it to this uptrend, line, as well, now we're pushing back to the upside all while, this is happening. We. Saw right, up in here. Not. A lot of volume in in. Volumes. Today we'll. See what happens towards the end of the day but. Again, you have to make you don't have to but, you have to have a guidelines and say if this breaks out I want to do something do you have to really get long and by that who, knows ow he also says well think about it considering, the ascending triangle for, Sox equities, it, seems the volume decrease. Is expected, as, part of the pattern. It. Is and it, isn't what, we'll talk about in future, classes is, oftentimes. What. Somebody, may look for is this popped up in here actually, looking, for a higher volume higher. Volume, in the inability for price to push all the way back down to the support. Line it. Pretty got pretty close to the support line but that might be a sign of strength certainly. When. We look at the candlesticks. In here. Hey. It's working now we look at the candlesticks, in here the. End. A lot of indecision, as it got close to that uptrend line and then, rallied up off of that so you. Know again we'll see nothing's, a, hundred. Percent. Okay. See core, of all bricks side. A, little bit different look here so we see Corvo dipping. Down. Below. It's uptrend line on the on the triangle, rallied. Back with a really strong move, the next day let's, zoom in on that nope. Only gonna give me one only, gonna give me one, well. Let, it hang there for a minute and see if it moves. But, these lower. Case are these lower. Candles, broke. Down rallied, back out of that shaking. Some people out a nice gap to the upside again a lot, of gaps in here nothing. Out, of the ordinary common. Gaps it's, the if, this area up in here that we're going to be really, concerned with let's move forward. To. Nvidia okay, now any guts I got a lot of action going on here on in video there's a couple things I want to point out before. We make somebody, makes any decisions. Number, one is, there's. This, and. This is what you have to understand, is this the way price, patterns, work right. The. Uptrend. Line again. Failure. To pull, all the way back down to, the. To. The lows of the to, this other uptrend, here so let me draw that this one in and. We see price, gapping, up back. In here on the last earnings it rallied, back up and, the. Point, I want to make here, is that, with. This one if we're looking for strength looking, for reasons other than just today's price action kind of looking back at those tracks in the sand and. What do we see we see price not being able to make it back down to this uptrend. Line gapping. Up sign. Of strength in here as, it breaks out sign a strength in here as it breaks to the upside pulls, back down so where did it break, to the upside to, and that's where. This. Line. Right here comes, into play okay. So it breaks above, this, kind. Of this wedge. Pattern if you will or this symmetrical. Triangle. And. It holds the, symmetrical. Triangle so it was showing strength, several. A few weeks back right, in there okay, several, weeks back but if we look at this on a five-year, chart whoops. We. Look at this on a five-year, chart.

Five-year. Weekly. One. Of the things that, we want to recognize. You. Get rid of some of these. Unexpected. Error of course. Got. Some issues. Here let's get rid of the let's. Just get rid of the. Volume. If we, look back on this five-year chart well, we can see that. This. High in here after it makes these lows is pull back on NVIDIA where, alleys back up makes, a high comes back down and that's where we started making these lower high so the point I'm trying to make here is when. We look. At. These. Lines I've got drawn in here understand. That. Price patterns, one, price pattern, turns into another price, pattern, before, it can break out so this, down trending, ascending. Or a symmetrical. Triangle we have here, this. Line right here. May. Turn into the. Line that we see here so we're down here we. Break out it bounces, at rallies back up well the next point. Of resistance is going, to be, this. Area right here and so, that's, what happened it's pushing through that today it, got. Near that area if we go way back here we go back into the end. Of the gaps back, in here. We. Can see why that was why, that was possibly occurring but a lot of strength today moving, to the upside. We've. Got the. Market forecast in in the favour breaking, out and if. We. Look. At the relative, strength it's, not a 52-week high but. It is making. Multi-month. Highs in here as we start to break out on NVIDIA. Okay. The next one we're going to look at is not a, semiconductor, but it is a, and. Earnings, play possible earnings play we'll take a look at that we have earnings, on. The. Morrow in the morning so. Earnings coming out this is United, Airlines Delta, Air Lines announced last week. Got. Nothing right these, stocks have been in this, kind, of this sideways, movement, for quite. A while. But. A three-year, chart on here so. There. May be some opportunity, for a couple different things right and so there's, an old saying that the, the, longer the base the higher in space if it does break to the upside the. Three-year. The. Three-year, trend. Is up the, five-year, trend is up, but, we've got this chop going, in here and when we say chop what do we mean we. Mean that there's, a box that it sits in. And. I'm just going to put a box around that whole area in here that box it's been sitting in actually for a little bit longer than what I doing this box what we want to notice right now is, a couple of things and that this. Box inside. Of this box we. Start to notice. That. Those lows, are getting higher inside, of the box we really never saw that over. The last and remember, this is a five-year weekly, chart so, since October. Of. 2018. We haven't really seen higher lows and we're starting to get those that, might be an indication of maybe some some. Underlying strength maybe some accumulation, don't know we, do know that, Delta. The, the, kind, of the leader in the group as far as price goes. Didn't. Get much action price action out of their. Earnings announcements so I don't know that that's going to flow over into, United. Airlines, UAL but, we we, shall see. So. With. That I'm going to go back and we'll start making some trades. Okay. So. A. Quick. Assessment. Of. Possible. New, strengths coming into a. Lot. Of these a, lot of these stocks in here. And. So. Let's get back to. And skip down to, Applied. Materials so, Applied Materials starting, to break out let's. Take a look at where our other risks, lie and that is. Earning. So if I put earnings out here so earnings are a month out. So somebody has some choices to make if. You felt that it was going to run you, might buy stock you might buy stock for, the short term a so called swing trade so, what's a swing trade well the swing trade in theory. Going, back, decades.

And Decades is a few. Days to maybe even a couple. Of weeks but not not really very long and. That's going to be typically, for the more active for, the more active trader if you, have a method, some, one of the methods we use here, in. This that we've been looking at here in this class is looking. For, the. Looking. For this turn to, the upside in the blue line along, with strengths in the intermediate, trend, as long. As there, is strength, in relative, strength because. If you're going to buy something you want something that's been outperforming, are starting. To outperform the market and. We're going to look at both of those today but so we're gonna look at a trade on on applied materials. Will. Come in here and click on trade, and. We. Know earnings, is about a month out so. You could choose. You. Could choose the three, day you can choose the. 31. Day 31. Day out so that may be just a little bit too far let's, look at that date again. 1114, you come to the trade tab and the, 15th, of November. Right. Here. 15th. Of November. Is the, is. The. Expiration. Day ahead. Of on. This is Corvo, sorry, my, fault there. Applied. Materials, I. Don't. Sync these to the charts because for. That reason. You. Trade something several, times and think, you're on the same you're trading something different, so ok so 25th. Of October, so we have weeklies on this. No so if you are inclined. To trade, options there. Are weeklies, and that's, defined by those words weeklies which. Means that these are going to have X options, explorations, that occur, on a weekly, basis, so you have a lot of, choices, to make money, management choices you're. Taking. Advantage of price and volatility, those, types of things so if you want to take advantage of volatility, and you want to use options, what, a, thought. That you might want to keep in place is that if we have earnings. Coming out in. Another month, we. Expect, implied volatility. To, increase, so. Let's. Take. Let's. Take this. Market forecast study off I'm going to put another study on just, to. Not clutter, the. The. Screen so, I'm going to go to studies, over here on the near, the far right in, the little Bikram drop down to the window that opens up quick study and that, opens another window I'm going to go down to volatility, studies which then gives me a volatility, window, and I'm going to put in implied volatility. And so. If we look at this implied volatility. Chart on Applied Materials we. Can see that. Over. In history. And. Plied. Volatility, can move. Can. Move higher so I don't, know I do it that way let's try that again. There. We go implied. Volatility, can move higher and. So if you were to be a buyer of options, in theory, you, would it. Received. Some advantages. Of that. Increase, in implied volatility, now this isn't a straight-on option, class for. That you can watch barb Armstrong. Getting started, with options, and, those are also in the archives you can watch weekly, options with Mike Follette every, Wednesday morning at 9:30, Eastern. Time and probability. Trading, with Mike Follette at. At. 12:30. Eastern Time that same day so, we, have a lot of options education. So please. Don't. Be don't be shy, okay. So, taking. Advantage of a. Swing. Trade type of a trade on a, breakout. With. Increases. In volatility. So again. If you, make a short-term, trade and you're buying an option, and. You don't have a lot of time. You may, be putting yourself at peril, at the same time if we buy an. Option. That. And. We expect price to move ahead and, we, look for the, implied, volatility, to increase. Just. From an implied volatility, standpoint, let's. Change. This up in here I'm just going to manipulate, a, couple, of things so I'm going to go up to the, layout up here and, that. Is just I'm on the trade screen going to go to layout and I'm going to go down to Theo price and mark just, for an educational, purposes let's, see, what happens if. Implied. Volatility. Increases. So I'm just going to go out. Into, say. C, October, we're going to go to November. We, know it expires. Are. The earnings are on November, 14th, so, let's go to say the first of November and let's.

Say Price. Moves. Nowhere. But. Implied volatility. Increases. You. Know maybe. Let's. Go back to the chart implied volatility, increases you, know another 10 points let's, say come. Back to the trade tab pop, that back down and also, going to do is we're going to just this is just to, get you to understand, implied volatility, so if implied volatility, increases 10 points, and nothing else happens price doesn't move you were wrong on your on your assumption. With, price moving. What. We see here is. The. The. 50 to say the 52 and a half about where it's trading right now you, pay 238. For that and we're. Out on, 11. One while you're losing money right you're, losing some money here if we look at. This. Strike. Right in here you're. Losing some money okay so that's with a 10% jump and implied volatility, let's, zero that implied, volatility, out and look, at that two dollars and twelve cents and you can, see here the impact of implied volatility. Is. You. The volatility. Premium is about 40 cents right if, you're expecting price to move it moves far enough fast enough it's, going to it's. Going to. Limit. Your decay, and time and it's going to limit that decay and volatility. But an increase in volatility may, as well, be, a. May. As well be something. That, enhances. Your. Options. So the, question becomes do you want to buy something 31, days out do, you want to get out behind, that say. 45, days give. Yourself a little bit of room and. We'll. Do the same thing. And. You. Can see here, giving, buying 45, days worth of time, and. Going. Till October. Or excuse me 11, November. First, even. Though price didn't, go anywhere from where it is right now those, options maintain, their, value. Remember there are transaction. Fees with, options, okay. So but, let's say that price moved. Just. To see it's trading of 52 so, let's, say it moved up about 5% so. Let's say it moved up and. Just, little more than 5% $3, and you. Can see here those, options, with that in Crete with that buffer. Of, implied. Volatility, time, decaying at a slower, rate those, options can be worth more, so what we're going to do on this one is we're going to look at them applied. Materials, we're, going to just. For educational purposes. Only not a recommendation we're going to buy a call, option now if we wanted to risk a. Thousand. Dollars you could buy for. These you know you if you wanted to risk less. Than that obviously goodbye, to depending. On you. Know your, risk. Tolerance but, let's not get so risky that we don't soon, we don't have any money to be tolerant, about about. So we're, just going to do this two. Times and, we'll. Send that confirm. And send we're going to put that in the active, trader. Strategies. Portfolio. And boom, filled with a mat now. Let's continue, on, so. That's a. Correctional very directional trade. So, let's go back to the charts here let's take a look at, the. Next one and this, is IPA. Chai, now this has earnings, if, we look at. Earnings. Down in here the, earnings. Icon. Will put a cursor over that earnings. At the end of the month so that gives us a couple of weeks if. You're looking at this and saying what's, nice about this, one is it's been in a nice uptrend it's forming this. Forming. This cup pattern, you. Know kind of this double bottom look we, had a bit of a shakeout shake some people out there and. In it held that, the. Support, area in here however you want to draw your lines it's, still, basically. You know without any manipulation, is. Still basically telling you the same story there's. Some support. However. You want to look at it whether, it's cup whether it's a. Rectangle. That shook. A lot of people out on that downward, day in there. It's seemingly. Holding, up in the face of a lot of negative, news out, there whether its geopolitical where, there's trade whether it's political whatever, it's. Holding up and so, with this one with just, a couple of weeks out let's go over here to the trade tab and take, a look at IP a chai. And. Trading. It sixty four eighty. Five right now on the ask and, we, can see just by, looking at the. At. The implied, volatility, here, now, this these expire, November, 15th, but. These, are the ones these are the options because there are no weekly options there's nothing in expires at the end of the month these, are the options that are going to garner, the most implied, volatility. Over in here okay. So, those implied, volatilities. Sitting. Up around, 54%, we, go to the chart in here and. I'm. Just going to go to the beaker, up in here and type in iymp. Another. Way to get to implied volatility. And I'm, going to take. Out one, of the lower. And. From. From, looking at this from one year really, that's all you really want to look back, timewise. On. Looking. Back two years is. Not, necessarily. Get a lot. Of get. You much more information, we, know that since last, February as this, has been in an uptrend really.

The Highs on this come. In around the. 60%. Area we're, just we're just shy of that right now so there's a lot of implied volatility, pumped into that with, just. A few weeks out trading. Out there but if you wanted to own this but, you know there's some things you could do you. Could come out and look at the, options that have the most implied, volatility, that's the 15th of November, if you. Wanted to own this. And. You were willing to let this pullback. Just. A bit, so it's trading at 65, right now you. Could sell, this. In the money option, right, you can sell this in the money option and perhaps somebody puts it to you but you can sell that for 3 dollars and 70. Cents you, could sell the $60, option, if we look at the chart sell, a put. A. Cash. Secured, put right, now right. Around $65. It's, slightly in the money for 3 dollars and 70 cents if you wanted to if you wanted to take a little, less risk and you, were willing to buy. It at a much lower price should, it break down back, down into the sixty dollar area, not. Necessarily out of the question you. Could give, yourself a little buffer if you, weren't quite sure you wanted to own it because earnings are coming up and. Maybe. Take advantage of. Again. Selling. Something you know further out in time or you could look at the ones that expire three days out and look, at this $65. Call, option, that you could sell for a dollar in three, days you're making a bet that, it's going to be above sixty there's no bid-ask on the, on, the. 60s. So you would be there so what we'll do here saying, that maybe we want to own this is. Look. At selling. The. Option. $65. Option for three dollars and seventy cents. Now, it's cash secured put meaning, that if you sell, this option you're obliged, to, buy, the, stock from somebody should they want, to. Put. It - should they want to divest. Themselves of that particular. Stock, so we'll just going to do this one time and see. What see, what happens taking in a credit of three. Hundred and seventy. Dollars. Or. So three hundred seventy hundred eighty somewhere in there okay. So. We. Just sold something at the money expecting. Maybe, price to pullback bounce but looking for this to break. To the upside now, if you sell something that slightly in the money. You. Know there's a chance that you will be, put, that stock prior, to any. Time with any option, there's always that possibility of. Exercise. And assignment, you know depending, on how that what kind of a trade you put on prior. To expiration, so, don't let that make. Sure you understand, that if you don't don't. Make any option trades until you do. Yes. Sharon, I do have, some. We've. Done I've done a few with, the market forecast as. Far, as those reversal, zones they're. Mostly, used for short-term swing, trades so the question becomes do you have any webinars that, discuss your use of the market forecast. With. Zones that you have on your screen as. A matter of fact if you want as. Well Sharon, and anybody else I'm. Gonna come back over here to this beaker, and, type. In. Whoops. Market. Forecast. You, make sure I've got the right one there, we go so.

This. Is the full market forecast, with three lines down here what I'm going to do is I'm. Going to. Left. Click on that and I'm going to share the the script. With. Everyone. If. I can get this to do. This the way I want it to do it. Give, me one second, and that, way you. Will have. The. Ability, to put this in your own. In. Your. Own. Platform. Okay. So let me expand. That name. We're. Gonna edit that and I want to expand, that out to say 36, font, you should be able to see that so, in your platform, what. You want to do is you want to put. This in the. Up. In the setup. Screen. Open. Shared item, and put. The. Put. That in there, and click preview just, follow the directions and that, will get you to that. Will put that in your in. Your edit, studies and. Your in the, your. Studies tab over in here and all you need to do is type in whatever name that you give it just follow those directions, watch. This again to. See how I just did that it's, pretty self-explanatory. Okay. Let me pop, up in here and take that out but. Yeah so there are some the, the ones, they don't jump out at me right off the bat so we. Just sold a put-on. I, pH. I and, I. Didn't. Put it where I wanted to put it. We're, going to move that to our, active. Trading strategies. Okay. Let's go back to the charts and see what else we have here in the, time remaining, so here's, a here's a different one so this is if. We're if we're looking. At this from a longer term you know. When a couple, weeks ago three weeks ago I think it is now we. Did a. Longer. Term discussion. On looking. At if I get the right tab here looking, at five-year weekly charts and you can see servicenow very. Strong to, the upside right, now the strongest. Sectors, in the day were earlier. In the day were semiconductors. And. Computer. Peripherals, and I believe software, as. Well so you can see this has had. A tendency to relax and. Then. It's relaxing, again now these base patterns, in here. This, these become, very important, to a lot of people because the this is, when. We look at what happened, hindsight, I know hindsight. I know but it was accumulation. So the question becomes is this accumulation, so, if we take the same strategy, that, occurred, the last time, and. We. Look at let me change that color. We. See this red line breaking out. Well. That might be occurring, right, now once. Again as we're, starting to. Break. Above this, line starting to break above the this resistance, area in here now, this has earnings really, rolling up on us. Next. Week so next Wednesday I think that is next. Wednesday so let's come in here and take a look at. That. Was J lowercase. J and so the question is was that, JY. Xqu, 10 yes lowercase, everything's, lowercase, except, for. The numbers, if that's I think, that might be an uppercase 0, or uppercase o and, not a zero on that last, so. You. Might have to just, write that down you might need to, change that looks. Like an, uppercase, Z, lowercase. O to, me all right thank. You for the question. Do. I consider open, interest when looking. At options. Yes. And, there's, one there's a quick, rule, a quick, way to do that if, we come into the trade tab and look at now we. Look at this, is a 274. Dollar stock. And we look at the o the, bid-ask spread, there's about 20 cents, bit. Aspirin, on a stock that's trading almost 275 dollars so. That tells me that there's probably some good action in here don't. Take don't, you know be careful you, know you know don't believe everything you see double check. So trust. But verify so, I'm going to come up to the layout and. Click. On open interest and we can see open interest very, strong in the thousands, going out 31, days right, if we're, looking at something that's expiring, next, week on the 23rd, the. The. Most. The. Most, implied. Volatility. Is the. Options that expire in ten days those do not have as much open. Interest, but they're still they. Still trade fairly, strongly we look at the ones that expire in three, days they have more open interest so, 10 days probably, just came online. For. Whatever reason, and. But. There's you could still possibly. Benefit. If we look at now and think that ok this is looks. Like it wants to break out can we sell, something over the next three days, and. Underneath. Where the market is trading and, and. Still, do, do, ok so if your if your assumption. From, a. Directional. Standpoint. Is that price is going, to continue, to. The upside, you. Might, sell something. With a 35, whoops oh let's get Delta.

In Here again. As. A matter of fact, let's. Just do it this way. Probabilities. You might sell something with a, 37. Delta, maybe a 30 Delta so you could sell a put, at the 270, strike $5 away for. A buck 50 and. 270. Puts you. Just. At today's, low right. Today's. Low and. Let's compare and contrast that, with. The. Ones. That's the. Same, strike 10 days out same. Strike 10 days out, and. Those are trading, for. $7, and, excuse. Me the same, Delta. At. The. Same, Delta is trading, for 4 dollars and 80 cents that's that same Delta same, strike, at, 270. Is trading, for 8 dollars and 10 cents so. You. Can get further away, of, course you're doubling your you're tripling, your time. Tell. Expiration, here but. You're keeping you're, getting further away and. You. If. The. The if the issue if. You're okay, with implied. Volatility, continuing, to increase that's. Going to hold up the price of these options so we come back over here to seal price, and. Mark. And we. Say okay this is still 1110. These, are expiring, on the, 25th. Of. October. Let's pull, this back remember. I got the Thiel price and Mark on the layout screen and now, I'm manipulate, to the to the tab. To the right of, where, it says the price, and Mark we can in manipulate. Time price and volatility remember. The in the in the disclosures. Time price and volatility helps, define strategy, directional, risk and those types of things so if we come out here and say, well these expire, on the, 25th. And, we, go to the 21st. And. We'll. Start just with zero price going nowhere, and. Volatility. Increases. Say 10% we'll, take a look at the chart and. Again. Put. Volatility, back on here quick study I'll do it the other way come to the beaker edit studies type, in IM. P. Implied. Volatility. Double click on that get. Rid of the. Lower. Pane and. Yeah. Implied volatility, is about as high as it, gets over the last, 52. Weeks so. It. Could go higher maybe, so maybe it, drifts a little bit lower, the. Impact of that implied volatility. Ten, days out. On. An option that's gone nowhere, the. Theoretical, price is this in, theory, these two sixties are going to which you're trading almost 6 dollars lose, almost. You know a little, less than half of their value in theory, remember. Probabilities. And our, theoretical not guaranteed, if, we look at the, two 70s 820. They'll, drop off about. 26. That's if it increases 10 percent it, may not increase 10 percent one of the things we can do is. Since. We don't really have well. Let's go back and look at the chart here we, have some outliers coming. In the last part, of last year, so. Which. Was that big sell-off, volatile. E increased, incredible. To an incredible, height I shouldn't say incredible height to much higher height so. Forgive. Me for saying incredible, so. In. Theory. We are very, close to those highs 46. Good. Get all the way up to 52, so we could see that increase. In volatility, move. Six. Points, in theory. Right. And. So. The, decision, is, if. We think it's going to go nowhere. These, two 60s. Get cut in half the, 270's. Or. Lose. You, know about a third or so so. You need, to make a decision do you sell something that doesn't have that, that's going to decay in volatility very quickly or do, you take chances. If you're willing to own the stock if you. Think. That it's going to blast to the upside but you're willing to buy it at a, lower, price then. Maybe you come down here and sell these 260s, which will do that on now. Right now again. These are cash secured puts you need to have the money in your account to buy these stocks.

Don't. Don't, take too. Much risk this is two hundred and seventy-five dollars stock if you can't afford a two hundred seventy 100, shares of a two hundred and seventy-five dollars stock back, off you do some kind of a vertical trade if. That if, that allows and so we'll talk about that okay so this is. The. Put. Spread or. The short, put if we, buy a. Call. Spread, at. The. Money. Right. Now. Load. That up two, and a half dollar white call spread costs, two dollars and fifty cents stock, is trading almost at the short strike calls it has to do is maintain that, area right, and so, your risk in this is /. /. /. Spread your, risk is going to be a hundred and forty five dollars right, versus. Getting. Put the stock so if you or. If. You believe it's going to be somewhere, in this vicinity honor. Before expiration, you may be able to take advantage of this, vertical going. Into, expiration, and, we're, going to do that and. We'll. Do that. Three. Times confirm. And send remember, there's there's transaction, fees and our, risk is 4:35, half of water typical, risk is in. These trades. And. Let's. See I don't know if we have time to squeeze out another one. Corvo. Breaking, out, just. Don't seem to want to zoom. In on that Corvo. Breaking out this is one that might be considered, I would, suggest for. Your, next step you, might look at some, of these stocks some of these semiconductor. Stocks like Corvo or Nvidia and make, some decisions, look at those option, trades look at getting long stock, recognize. That there are earnings, that are coming out to, the upside and, are, in, the future so be very careful so that's going to be your next step make. Those make, some kind of trades in your paper account, practice. Practice, practice that's. Why doctors continue, to practice you don't want a doctor that is top practicing, so. And. The same with the everybody. That's in a profession, this is a profession, this is a business treat it like it is a business, and. You. You. Hopefully, will gain. From that. So. Yeah. Ricardo says which one worked. I'm. Not sure which, one worked but. In any event, that's. Going. To be take, us to the end of a summary, things. Change, so. When. Everybody's, looking at what, everybody's, been buying, sometimes. There's, a rotation and, that rotation, may, maybe into. Those, beaten-down, areas, and, look for those stocks that have held up well look for the stocks that have coming out of a base pattern after a beat-down and, and. Make some decisions but act on that change, that's, the deal with, that everybody. Have a wonderful evening and rest of the day and. Remember. Every decision that you make and your self-directed account, your responsibility.

2019-10-18 18:04

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