Relative Strength & Trend | Technically Speaking: Trading the Trend

Relative Strength & Trend | Technically Speaking: Trading the Trend

Show Video

the technically speaking treated and trend weeks to months. We'd like to welcome you here today. We got fares. Dylan George, Texas Orlando says he's at the SFO San Francisco Airport. Admiral Club. We welcome you, admiral. And also, we got Fabian actually in Switzerland and baby and I've actually been riding my bike over in Switzerland. Uh, Was in grand of all the other day, and so good times. You haven't been

Switzerland Boy, you need to get over there. And I would like to welcome Michael. We also have Ken Rose in the chat. We welcome him and Luke and many others. We welcome everyone here, so just reminder.

You can follow Kenner, myself or any instruct on Twitter. We do post educational content, their daily Sometimes you post pictures about ourselves, our families our lives. We also do post educational content there. Check it out if you haven't been there. Now Also remember

that as we get started, remember that when we talk about investing, you should consider investment, objective risk and charges and expenses before investing. We talked about options here today. Remember the options are not suitable for all investment, special risk inherited trading options trades, you should review what the transaction costs are. You also need to understand that you should debt we're going to hear today.

Demonstrate the function of the platform. We're going to use actual symbols. Remember that any investment decision making her suffer? Acted a counter still your responsibility and also last, but not least when we talk about options, or if we have questions on those Remember Delta Gamma Bagan data.

Those are sensitivity to doubt to changing, changing the price of the option for the price of the stock. Uh, there you will be the change. Based on the volatility. And also the fate is that really the sensitivity to time? Those are things very important to help you kind of understand how the options move Now. Today again, I was always this week. We call Thursday trend Thursday, and we talk about trends being super important. We don't want to

just look at short term. We want to see one of the longer term trends. We will be talking about relative strength here today for sure we're going to really also be talking about really examples of shorter term bounces in longer term trends.

Okay we're going to talk about double bottoms. We're going to talk about stocks that are making higher highs. Maybe breakouts of flag patterns, things like that, But we're going to get a nice little dose of relative strength here today for sure. And lastly, we will also talk about maybe existing protection. Maybe on the stock

like an apple or McDonald's. And maybe are those examples to consider exiting protection based upon the stock movement will discuss this. So let's actually go ahead and actually hop right in and let's go ahead and actually just take a look at I'm going to start with. For

example, the Dow first. And if you actually take into the Dow and I kind of minimize this a little bit down here below the relative strength, which will bring up But if you kind of take a look at what we have, we kind of had this like down, move right? Okay went back up. Double bottom gave the last four or five days. Five kind of was choppy as those down here that prior low and then what you're going to notice is the Dow The first time if we were to close here, this is the first time we've actually closed below the 30 period moving average, and it's been a while, Okay on 93, so it's really been almost five weeks since the 30 Day moving average since the price closed about the 30, Okay, we're making the assumption that the index holds. Some are close to near where we are. And the price days above that 30 period moving average, which is at 3 47 60. So some of these Dow

stocks, uh, holding her pushing up, we said rail raise stocks. CSX um P etcetera. Those actually had quite a big move yesterday. We said could those. Transport stocks lead kind of looked like they did. Okay Now we know about a week or two ago We saw airlines move up quite a bit, too. So some of those

doubt transport theory kind of playing out here. Well we actually take a look at the NASDAQ. What you're going to notice is not as quite as strong. I mean, you're going to notice that when you take a look at the NASDAQ, you've got a low What? And then you got, like another low down here. And if you kind of take a look at this, you kind of have, like a lower high. You gotta lower

high right there. You got Maybe this area which don't know yet It's a move back up, but it's not a higher high. So if we were looking at this graph, and we were trying to kind of say in this case, where is a level of resistance? What would you really say? Now I'm not doing the move. Okay? I'm just saying that. It's not as strong as the doubt. Okay When you look at

areas of resistance on this chart, you'll notice we had a gap down that gap down. Let's kind of mark that. That's about 15,014. And then what? You're kind of notices. The lower high area is really right about 3 15,036 So clearly the NASDAQ, which went down by 8 to 9% It has some more room to go back up to really show that this is reversing. It is a good first at being that we add, could be open about the 10 period moving average. And if the price were

to close here, we could close above and we hadn't done that The last time we actually did. That was all the way back here at 99. Okay Remember these indexes, some more than others have actually been in that little correction phase, Okay? Now last, but not least, if we take a look at the TNX quick reminder that when we look at these interest rates, which we might have questions on financial stocks if those rates are going higher, some financial companies might benefit from that rise no different than, say crude oil and energy stocks. We see that

in the last couple days, we've actually seen those interest rates go up now. Aren't you glad, For example. Your house is paid off. Aren't you glad that you already haven't fixed mortgage right? Anyway But if you kind of take a look at this kind of a classic flag like type of pattern. And if you

look at that, a recent bounce off that upward trending 10 period moving average the last three days in a row or two. At the last three days, there's been a CAHOLD-, actually right there. There's been another CAHOLD-- right here. Okay It's

right there. And now what you're seeing is it's breaking inside. Really That old channel. So where could those

rates go? When you see old chin or what do you mean by that? Well this is kind of where we have like a sideways rain for a while. This was probably the top end of the range sometimes when you actually break. Inside this whole channel. This price

in this case we're talking about the interest rate. That price might try to go the top into the channel, and it might do it sooner than later. We don't know that, but some ambassadors might be forecasting a quicker move than others. Now last one before we look at individual positions, I'm going to go take a look at my exam. Last night on the technical analysis in person event we talked about no. That

was not there. He was on the twitch dot TV with Tdameritrade and your host, James Boy. We were talking actually about the inverse head and shoulder pattern really on the financials and you see it Actually, here left hand side shoulder bottom right there.

There's your melon or what's also known as the head, Right can and you're going to see on the right hand side. There's that shoulder. Okay now, if you look at the neckline here, okay.

Kind of your classic neckline, multiple touches that resistance Today we actually went up and Out. To a brand new high. We might not necessarily close above that resistance but at least kind of went to that high. So again many investors if we said what sector. Is actually breaking out to a brand new high. The only sector

that we might think of that might be doing that might be the financials and the only other one that we might be thinking about. That's going to be dead Gum close is really your energy space, okay? Now here's the deal. Now let's shift to our nets and Jen item. And let's talk about some new examples. But member we like to kind of do this as a routine looking at the indexes. Find actually look at the interest rate T and that's awesome. Feel

for you to look at crude as well. You know, we take a look at crude sold off $2 earlier in the morning bounced back pretty hard, though, okay? And so if some of these energy stocks they're not dead, they might be trying to actually in that continuation pattern. So when we do our routine interest rates still up their crude oil still up there, And now when we actually look at the sectors, we know that probably when you look at materials Excuse me, financials. When you look at

energy stocks, those are probably going to be up there in terms of relative strength today. Now let's talk about some individual examples. And I want to, for example, pull up a stock, okay? I'm going to bring up the example. And the one I

want to really bring up in this case is let's go Since we're on this oil team. Let's kind of go back to, for example, Chevron. Okay now, are there any investors here that, for example, like dividends, anybody. Okay Now this we're looking at up one year daily chart, And when you look at this trend, it kind of looks very berry Cyrus. I mean most of the year, eight months of the year, it's been kind of. Let's say range about 95. Then

you got to want to Levin yourself and what you're going to notice is it's coming into earnings now recently, Okay. If we take a look at this, you can kind of see that we kind of had a downward sloping line. The downward sloping line was created from lower highs and you're kind of see why in touch to touch three touch all in the same area. Now, if you want to say jeans boy, I hope that one word that you would say, how do I describe James? I want the word diagonal. What really kind of maybe be. You know in there, Okay. How would I explain,

Jean, you know, you know, Diagonal would really be a compliment. Okay Now, if you look at the chart where you'll notice is the diagonal and the moving average crossed over. Pretty much right at the same moment. Now the stocks are okay. Now we miss the opportunity. Well, maybe not necessarily. Okay when we go back and look at the three year weekly chart while you'll notice is it's kind of in this old sideways band and you're going to see that kind of this area kind about right cheer. You really

got about. There's not 1, 11 and then right above that you're going to see in this case you got about the 1 25. Now this is kind of where the investor says, Well, what I'll do is all get in at if it were to break 1 11. Okay Did you get

in when it broke the diet and resistance now? Okay, so maybe sometimes. People might say things just say things but not necessarily follow through. The biggest. Actually thing is, if you look at this is if these crude oil prices keep going up, the companies in that space might raise their what. If the

crude oil prices continue to rise, these energy companies might give higher potential forecasting. Oh, my gosh, Look what happens here, Right on 10 29. They got earnings upcoming about 3 to 4 weeks prior, A lot of investors will start to put on investments or trades where they start to speculate. What

those companies earnings and their forecasts could be now what I want to do here is we want to kind of show something down below, Okay? And by the way, if this stock word let's say break above 1 11 the path of least resistance might be that might try to go back up to 1 23. Get now if we go back to the daily chart, what I want to do and I really want to kind of hit this hard. Is down at the very bottom. I want to kind of change something. The relative strength, okay? The first relative strength line is going to be just a good old S and P 500. So if we want to let's say, Look at the in this case, the red line that is the S and P 500. What is the green line?

Well, the green line is really the performance relative to the S and P 500. Okay, the SPX-. Now down at the bottom. What you're going to notice is the exceed. That's the benchmark

And now what is so awkward about this? I mean, tell me what's awkward about this. You're seeing that really the performance of C V X is underperforming, relatively IXY. What is this kind of saying? It said that there's probably a lot of other stocks that are probably doing maybe a lot better now it's going to see the next next next stop. But sometimes investment made me want to find the stock. That's maybe been out of favor that might come more in line with something in line with maybe the sector in general.

Okay so it's been outperforming the S and P. But boy, it's really been one that really hasn't performed very well compared to the basket of energy. Let me give you example. If we looked at CLP, we know that stock has gone blink to the upside because it's on the paperMoney account. And what you'll notice is when you look at the S and P Red line. And there's the green

line. When that those two lines are getting farther and farther and farther apart. Saying the investors in that one that's going. Running to the upside, which is wonderful. And if you take a look at let's say the stop. It is also getting further. You want me to do that

again? Further and further away now except predictive. Is that saying that it's always going to be like that. Of course not okay. He's just saying kind of showing the past track record. Now I'm going to bring up at one. Let's go, but I'm going to

go back to Chevron. These stocks have Chevron and also you're going to notice here. ExxonMobil they have actually earned. Excuse me. Dividends They're coming up and about the next five inch or so weeks. The

last ex dividend date was 18. So if you fast forward that three months, you'd really be about 11-18. Okay now their dividend is actually 5. We're not talking about some chump change here. That quarterly dividend is actually $1.31.34. When you look at Chevron's, which is a little bit earlier, you're gonna snow. It's

actually close. It's about 11 12, So it's within about a month ish. And that yield. Yeah, okay. Got 5.73% And that's actually what the stock that's been recently been moving up quite a bit so someone questions might not just buy stocks just because of price action. They might want

to kind of say in this Is there some chocolate chip cookies or I should say chocolate chips of maybe some dividends as well. Now the paper and accounts going to take this trade. With the idea Long stock trade with the idea that it might hold it long enough where maybe that's this, they could have potential stock appreciation, but also maybe get the dividend as well.

Okay? Now if we take a look at this, let's say if we were to ask, where is potential support, okay? Where is potential support? Hmm. So the stock you know, we kind of see support was way down here, but that that was a little bit again. Then we can actually say old resistance really becoming new potential support stock ran up Pull back. That kind of looks like a flag to me. Once say you runs up again pulls back doink and you're seeing.

It's kind of maybe somewhere there so this area and this area really represent where it goes up and curls back. And then bounces. Okay Okay, so those kind of might be some areas where the investor might consider setting stop below. Pull out the calculator. Okay let's say the ambassador, said James, This is really more of a trend train. I don't want to set the stop so close, okay? And I appreciate that because investors who are trying to trade the train. They're not

trying to get stomped out on short term price fluctuations. So at the ambassador said, I'm going to take the stop underneath one on 1 43. Last 3% that stop would really be at 98. 38 okay. Gonna right click on the price craft. Going to go

down to where it says bike costume, and it's going to go up to where it says with Ocio bracket now. We're also going to kind of put a price target on this at that higher threshold, not 1 11. We're going to go a little higher than that. And we'll show you

that. Okay, so this is a bracket or entry. Having a target and a stop. The first thing that some investments like to do is they like to kind of put the stopping they like to kind of know. I don't know if you've seen that. I think it's I can't remember the commercial where, uh, they were.

It's what's those commercials where they talk about? As you're getting older? Don't act like your parents. They were going into the game, and they said So. Do you guys think you want to leave in the third quarter? Like and, uh, if you've actually seen those commercials? Sadly I feel like I've said everything on that commercial, and I'm starting to realize. But maybe I'm becoming

like my parents, which is fine. They're great people. But if we take a look at this 100 shares of stock that people in the account is actually going to pick that up. It's uh well, not

actually, it would be about right. If we want to kind of keep in increments of 100, we could go up to 150 ish, but it's going to keep it at 100. Now that upside targets going to change data GTC. Yeah, progressive, Okay. It I swear my wife is she was here, Amor. Tell everyone do I do that? She said Yes, He parks in the very corner so he can get out first and get home first. Thanks

anyway. Now, if you take a look at this what you're going to notice since the upside, Okay, Really We said could have maybe break 1 11. Could it maybe try to go that second area? That second area is really right about 1 23. Okay Now let's say, the ambassador said. Look, 1 23

years if it was perfect. Okay but wonder if we know that support resistance. That's an area maybe the investor says. I want to get out if it goes a little just a close for in that facility. So let's say we set a price target at 1 22. Limit or saying that price for better.

Sell the stock if the stock were to go down to 98 38 or less. Now that's just really kind of taking the secondary area of this higher low. That was really right at okay. Move

that down so we can see that better. It was actually right at that 10 day moving out a little bounce area right? There didn't take the most recent one. Took the one prior. Okay so that's where it's getting the stop. Okay Now, let's kind of go back and actually take a look at this. Let's go actually confirm and send. Now you're going to notice. It's just a

capital to buy the shares. Okay Now what I want you to understand is there's not a commission. Okay It's just the capital by the shares. We know how to stop works at the stock was that price or less? It can sell the stock at that price. Okay or even lower That's the risk of the stop Now to pick money accounts. Gonna send your

okay now what I'm gonna do is if I were to go back. Let's see, the ambassador said James iconic, considering and investment in Let's say a energy stock But I don't want to see something that's outperforming the S and P, But I also want to maybe see something that's not so far below. Let's say what the sector is doing. Now I'm could you give me some names of some energy stocks that you think maybe are having a better track record or history? Yeah we're not planning on giving that dividend. Uh we're probably

thinking that might be four or five weeks out as far as that ex dividend date, So this is kind of like buying the stock. With the idea that maybe it's going to take some time. Hopefully it kind of takes his time. A little bit where it can also, maybe get the cherry potentially on top of actually grabbing the dividend. Okay If that move if that move goes up in 10 days to the 1 23. It's only going to get the stock appreciation and not the dividend. Well if we could have

thought of maybe some other stocks, Okay, so I'm gonna go back, Amanda says Okay, Let's take a look at this. Guys and gals are gonna be ox. Okay? I'm kind of like. I'm kinda hard on

myself. I'm hard on my kids. I have, like an expectation, Okay? And I like to set a standard and like to stick with it. I don't like to change, okay? The biggest thing is sometimes when you look at charts, I just don't believe it takes that long. Okay, so in other words, if we pull up an energy stock, okay, now, if we said okay, go to analyze, Go to fundamentals, Caddy, and what we can actually do is say okay, we can type in, Okay and say, Well, how would I know? This is energy. We'll

analyze. Fundamentals Okay, and look right below in blue underline its energy. So when we look at the chart, I'm fine with keeping that good old SPX-- Okay? And then if we go down and say, what am I? What's that second benchmark gonna really be? It's going to be $IXIC. Now, this is actually been something again. Red Line is the ICSI. Red line. Actually

here is the bench for both. You're going to see on both of those metrics. It's actually been outperforming the S and P and the energy sector. Now again, That's not saying that's predictive of the future. But the ideas maybe could that trend potentially continue That's the idea. Okay Now, if we zoom in on this, this is a 60 yard stock. Now if you take

a look at this this kind of has your classic cop like Pattern, but. If we're talking about let's say British t What you're going to notice is you don't really actually have a handle. It kind of just went off and then it just broke out. Okay now, don't worry. You don't always have to have every pattern Perfect Like in a book. Okay This is the same idea that if we look at the width from the base of this cop or ball up to the area of resistance you really actually have about $7 now, $7. Add that on top is

gonna get us right to about 64 die now, if you take a look at $64, it's going to be about right. Oh now, Okay, so $64. Now the stocks at 60 now is that saying if it goes to 64 that's all she wrote. Well not necessarily of that trend will continue. We also might use feminine. Ah cheese to kind of get an idea of maybe where that stock might try to go as far as a measurement, especially, we're trying to trade dependent. Weeks to months Now,

if you take a look at this, what you're going to notice is if we were to draw from kind of resistance down to the support area, bodies of the candles, we can actually see that. The 200% It's just gonna be the channel whip or the cop okay, and then adds on top that measurement. It's at 65 pretty close to our 64. We go to the very next

level. 261 is really about 70. So now I am not trying to just kind of dog piled a bunch of energy example. But I want to show an example. Maybe it's one that's underperforming that might try to go more in line with the sector. That also is paying a dividend because some investors like that as a part of trading the trend, But maybe also another example. Maybe

where the stock, for example, is something where maybe it's just kind of more of a momentum type Example. Okay. Now when we actually take a look at this, I'm going to kind of delete that. But 70 is that number on the top. I'm going to write that down 70. Now if we go back to the Let's kind of for example, do this. I'm going to right Click on the chart. Drop

down the bike Custom. This is not something that has, you know, It's not something here that's going to take $50,000 if the ambassador buys. What 200 shares of stock we're talking about 12 $13,000. Okay Now, if

we took a look at this, why did that? But let's kind of go back to 200 guys thinking they were good, 2000. There we go. And now what we're gonna do here because that's about the position sides this paperMoney account and handle Now, if someone is trying to trade the longer term trend, they might not set a target. At the first initial Okay, resistance area like 64. Now if we go back and

look at maybe the area some pork. Now this also kind of goes back to where? What is the stop being using as a support level? What? What has it been using? Now back in here. It kind of looks like it used both moving averages. It was just kind of sitting on both lines. And then the stock when he started making some higher highs and higher lows you'll notice is not really coming back to Yes, that 30 period moving average. It's kind of been holding. The 10. Any

minute holding the team and so now, if someone's trying to train someone is probably not going to take maybe a stop, so quote to where the current price is now, In other words, they're going to allow the stock to exhale or come back. And maybe retest. Maybe where there was more silence. Consolidation air. They're

trying to ride the train. Now that area. Follow my cursor to the right is 57 82. Now if we take a look at 57 82 less 3% that's gonna be 56 08 paperMoney account is going to go down to that. Stop 56 08. And now what you're going to see is gay. GTC day to gtc. Now let me ask you something here.

Okay let's say that, someone said. Dead. That they were a relative strength and Bester. And they had no energy stocks. Now Could that be the case? It could be. Maybe they actually just have a lot of other positions that historically they actually bought right. And

those investments are still on right. But if someone said I'm a relative strength, ambassador and they maybe had capital to consider in using as an investment. There's been some opportunities here in the energy space. Okay There's also been some opportunities, potentially the financial space based upon those rates rising now, that's not saying that all investors actually have to invest in those areas. But if

there truly in the areas of relative strength, and they might consider those areas they might consider the potential of those trends. Now, if we go back to let's say, confirm and send by, plus 260 96. Target 70 stop at you right there. We talked about how that stock works, and there's the capital Boss. Stop 12,000. Okay Now, if the ambassador says, what games does this one actually have a dividend? Let's go back and take a peek if I were going to trade that damage and is also 6% as well, Okay? So it's about 6% quarterly dividends about 93.

Cents with the PE trailing of actually 20.17. Okay, so I can't really say it. Trading it up high multiple, Okay, 20. It's not really doesn't really stand out that much. Okay now, Nairo narrow book follow, says how about selling the November 2100 Put. To commit to buying

100 years instead of buying the stock. Okay So let's kind of touch on this. Just perfect. So now I think your question was actually back on. When you actually brought up the example.

Let's say Chevron if Ambassador is seeing reversals in some of these trends. What What is very important, Ambassador says they want to mimic performance of the S and P or maybe certain stronger sectors. It's important to get strategies that have a higher Delta. So

let's imagine some of these stocks move on. Him All the investor did is they only did short vertical put's or short puts only would you expect about investor would have similar market returns. Then let's say the S and P. If they

did strategies, they had a maximum game. Uh I would doubt that Okay? I really doubt that because member when you look at a short vertical put might only have a dealt of 10 when you take a look at the, uh, A short put cash secured put, it might only have a delta Maybe 30 to 40. Or maybe last, Perhaps. When the ambassador starts to see reversals. Diane Nature horizontal nature. That's when the investors trying to pick strategies that could be more directional. How would you know

how directional they are? That's when you look at what the Delta is The higher the delta. Okay the more sensitivity that strategy is to the direction that guys and gals that's something very important to understand. Okay? When that stock brakes don't dagger resistance line, everyone in there. A lot of people had chances time to sell their all this time to sound okay there the last three months of self. All that sort

of that stock starts to break resistance goes, sellers might lose control. And if that stock starts to go back up that stock upside who could be potentially meaningful? Does the investor want to tap catcher just such a small portion of that? Move now? Some ambassadors say Yeah, I'll take 30 cents on the dollar. Other investors. They might lick their fingers okay and say I was kind of thinking of something more than that, Okay, And that's where some ambassadors are different. Some investors say I want a higher probability. I'm okay with

taking less. Make sure your spouse knows about that, but the other side of that trade is, the investor says. At certain times when maybe there's been a sell off. And maybe there's a greater chance for these stocks to slingshot back up the investment. I want

to say, I might want to consider taking risk when others don't That kind of goes back to the Warren Buffett philosophy, right? The greedy when other people are fearful. What does that even mean? When the stops are selling off? People are fearful, right? Big greedy does be greedy, actually mean Do an iron Condor. Short put Cat secured put, you could. But the ambassador's might want to try to have some positions that have a higher potential upside. Okay. All right. Now

let's go back and let me know if there's any other questions that we get addressed. Now what I want to kind of do is I want to come back. To an example of how many you remember us talking about the example of Apple and how Apple was the example of a caller. How many of you remember this now? This is only fair to kind of talk about this is about to talk about now. We won't talk about

it till next Tuesday. Okay now, while you're going to notice is it's 257 Shares of stock. It has a short call it 1 43. And

now the stock is, um, above that strike, okay? Now what you're going to notice is the call is losing money so far. Okay. Why is it losing? Well because it actually has a higher probability of the stop closing above the strike. When the stock goes up the call Value goes up, okay? And since the call was already sold already at one of six, the call does not cease trading after the paid money count, sold it. The price still adjust based upon what the stock does and you can see it now higher than where it was initially sold, and that's why it's showing a negative number. Now while

you're going to notice just to put really hasn't lost the whole lot. It's up $58, but I want to actually go back. And I want you to tell me should maybe the investor consider taking the protection off? Is there may be a reason to think that maybe the stock is breaking resistance. Now investor might consider taking off the protection if they think maybe the sellers are losing control. And the stock is getting above resistance, and it's starting to make a higher high. And or or with. A higher law. Let's go take a

peek. Remember Whatever you tell me is whatever I'm going to actually show this paperMoney account. So what we're now going to do is we're going to go back to Apple. And now when I look at apple, let me zoom in here. Tell me what we see on the chart. Do you see anything on the chart? That might so first thing? What we need to know is what has been acting as resistance. So we

knew if I start nor resistance is thinker resistance as a seal, so when the stock actually went down, Okay, when the stock at you went down, Where did the stock go back up to Okay, Then the stock went down all where do the stock go back up to? Where do the socko down? Where did it go back up to When down, and then here it was as of yesterday. So when the sock went back up, is there any tracks? Okay footprint, so to say of what was kind of acting like the thick sheet of resistance. Well you know that 10 period moving average, that blue line it looked like it was kind of acting like a little ceiling there. Now let's make an assumption that, for example, Apple closes about here. Now some investors might say, James, we're seeing a breakout of resistance resistance have been here. Fear in here. Okay Now, if that player starts getting involved, this might be there.

Early signs Of actually getting a change in trend. Now remember the. The bad part is what you're gonna notice is when you look at let's say the protection. Selling a call in

the buying of the put is a bear. Those are bearish trains. How would the investor make the trade more bullish? How do they make it more bullish? Type in your answers. This is very important. A lot of people

think. Well, you gotta you gotta buy new sheriff's. That's not true. So do you realize that short call that really has 113 Delta? The long put has 119 Delta. Do you realize that

they're paying money? Count exit of those. It's like the paperMoney account, added 230 Shares of stock or 230. Delta. Can. All it takes is the ambassador. Seeing that the stock is breaking resistance if they buy that back if. Parts

the delta back up because the position right now on Apple is only $24, or 24 help. So if we imagine, said Look, I want more direction Explosion think the investor says. I think that stock in reverse. Well, they might say I'm going to accept the protection based upon the resistance Breaky. How would

the investor do that? Well they can right click on those lines created closing order. And say, Let's accept the protection that guys, I guess I think sometimes we make this too complicated. Taking off. The protection is really coming back to the very basic thing, which is the stop breaking resistance not gave. How do you know? That the stock is going to continue going. You don't

know that. But if the stock is actually breaking two resistance and making a high highest probability, okay. Not absolute, Highest probability is the stock could try to make a higher law. So the ambassador saying Go long the shares. It's still long right now. Accenting

the protection Now the problem is if you actually the protection is there stop. On this stock now. Is there. Stop? What was acting as the risk management. Okay The risk

management was the long put, which is the right to sell at the strike Price. So the paperMoney tell X is this. Number met and ambassador who understands what say James probably need to actually reattach that book. I would say, Man, that's a smart investor right there. The ambassador exits that protection. Send the order. Now

they come back to the chart and so okay, what is acting like a level support? If they said James, I'm kind of seeing that. Maybe that 1 38 95 has kind of been acting like a little level support. 1 38 95 right on the calculator, the ambassador says, I'm going to set my stop. 2 to 3% below that here. They might actually said that stop at 1 36 17 not clearly that investors really thinking that that stock could actually hold. Okay. The protection exits. Now

the investment of 207 shares it bent. There is no protection the stock and fall to zero Right. Click on the shares. When in doubt, rightly Created, closing. One Of the Stop back on. Okay Why? Because along put

is gone. We stopped now What you're going to see is just now just very basic resetting the stop. 1 36 17 stop day GTC. Confirm and send. Then there's your classic stop. Now what you're going to notice is why did you talk about this today? Well, because we set an alert this morning and probably about 9 40 my time I got alert, an email saying Apple. At or above a certain price, and that was kind of telling us Hey, stock could actually be breaking resistance. Okay That's what

we're talking about. Now So now what we see is, uh, there's the stop. Send the order. We go back to the chart, and we're watching notice right on the chart. Ah there's the stock. So

if that locus knothole, Okay, the stock goes down to that 1, 36 and change. The stock is going to be sold at that price. Or lower. Guys and gals. Callers can be pretty simple because the ambassador is gonna caller yet the stock brakes resistance they they don't have to, but they can access the collar. Be long the stock position. And then just re put back on the stop, which is a beginner trade. Okay Setting a

stop is the most beginner thing you could really do. We're not talking about some of the bank. Okay And by the way, the action of the caller is not advanced, either, because really just goes back to what we teach and. The virtual workshop. A technical analysis on night number one trans support resistance. Okay night walk, Okay, not 9-10. Okay night one.

So if you feel like you're making it too complicated, you probably are. So go back to the basics and say Also, some of these investing decisions are considerations Come back to the very first things you teach a night one of the technical announcement further, and that's true. Okay now, let's go to other examples. Okay Now, if we were to look at, let's say a stop. I want to kind of go through some stocks is briefly.

And now we're going to talk about a little options here, but I want to kind of bring up a couple of stocks. Let's say that are in. Let's say the NASDAQ. So one of those stocks has actually been quite strong here today is let's say Xilinx going into earnings kind of dumped down a little bit, but actually went up to make a brand new high here today. You're also going to see that when you take a look at this a stop, for example, like Mary, yet we know that some of you have actually talked about that stock is not it it it high, but the 10 day moving average. Has

been the friend of Marion. Hilton You're probably thinking it might be something similar, and it is okay. Now if you take a look at the stock like Tesla going into earnings, you'll kind of notice that it's kind of been holding the 10 as well. Remember if it holds a 10. There's a little momentum there. U S bank. We've talked

about this a little bit. You're going to see that that actually kind of have a pattern went to the upside a little bit. My big trying to back might be trying to kind of re test. All resistance, which is probably right around 61 7 yourself. Unusual volume and optional unusual volume activity on nd AQU the NASDAQ. Okay We're not

about the NASDAQ The index okay. Andy AQU, snapping above the resistance lines going into earnings, maybe a little speculation. Look at the volume. Looking at also entered international. I believe

Intercontinental Exchange and if you take God you look at that. You're going to see that what is going on there? Okay The those are all NASDAQ related names. That was big volume going into the resistance yesterday on that stock. Today Gapping up,

leaving a hole in the chart. Now I want to kind of go back just for a quick on the S and P 100. It's not just in the energies in the financials. We're also seeing that also in some industrial stocks, Raytheon that continuation after a long long okay? Term resistance like 88 a half resistance got above that. Okay

Brand new. Actually, here high here today on Raytheon. I'm gonna actually mentioned one more in Industrials. And it's Northrop Grumman. Hopefully, I said that right? I don't see exploded, actually hired recent crossover and diagonal line.

Break out. Okay, again. You should know that when volatility goes up Diagonal lines. Potentially breaking become really high, okay when the diagonal line breaks and the stock makes a high flag patterns become very, very common. Okay Now what I'm gonna do is I'm gonna pick an example here and we're going at you Look at the stock. I'm going to

go back to let's say a stock. I'm gonna pick in this case. Northrop Grumman in this talk old resistance. Not enough You've ever felt like this. But

have you ever felt like maybe in this case that. Hey, James. I missed the entry. I you know, got caught up in whatever, and I wasn't paying attention to the stocks that were breaking out. Whatever Okay, Now, if you take a look at this, what you're going to notice is this has been a stock that's been underperforming, the S and P and also it's been underperforming. The industrial

space Now, while you're going to notice is that it's been coming back a lot closer to both the index line of the S and P and the sector line. Okay, Some people like that, Okay? Now if we go back, let's say the ambassador, said, James. I want to consider an entry or maybe try to buy the stock near that 3 74 near that 3 75 areas that steer right well, the investor might come to the trade page and say, Well, could they example sell a pet. Okay maybe right around that 3 75. Now the one thing is when you take a look at this, the bid and ask spread is going to be dependent upon what will equipping in that moment in time. If we take over this right now that spreads about 60 cents. This is a bigger dollar

stock, so that's not unusual to have a little bit bigger spread. It's all about percentage, especially with these bigger dollar stocks. But at the ambassador, we're going to look at this. They might say I'm going to consider and trying to settle, okay? Maybe a put and if they wanted to, they might say, James, I want to buy a put be love. Okay just in case for protection. And also with that they actually might say, Hey, James, I want to actually buy a put because I don't really want an outlay or hold up. 375.

Dollars per share times the number of contracts to consider a bullish trade. Now what? Where do you get that number from? Remember when you sell the put, they're going to really be tying up a certain number of a certain amount of collateral for the obligation now since this trade is coming up as a vertical, it's not showing a higher buying power, facts and collateral. 3 75 is where the big money kind of saying it will buy the stock from now to expiration. Their protection is at 3 65 and the credit There is 2 75. So the ambassador said, James, I have $12,000 in 19. You know it

would be tying up 720 of that. And there would be a credit there to 75. But the trees clearly wants to start to stay up above 3 75. If it stays up above 3 75 at expiration, it grabs. And can keep the $275 credit, okay? Now if the investors Okay with that, remember what the commission is there it is. Senate or Now. Here's the deal. Okay, so first

off what I want you to understand. Some stocks will lead the indexes. As indexes fall down or sideways. Ambassadors start to pick companies they think might outperform the index, or maybe their second general that never changes. There's some ambassadors that are always valued vessels. Always garbine vessels. Growth reasonable

price. They're always looking for stocks that might outperform or re. Sustain or read up their forward guidance. Some of these stocks three weeks prior to earnings can sometimes have a lot of breaks.

Okay for some investors. Three weeks. It prior to earnings is maybe more interesting than being on the week of earnings itself. People tend to put the trades on and they start to speculate what could happen.

Okay I'm out of my time here today. We wanted to talk about the indexes. We talked about the W pattern, saying the Dow is actually the strongest. Make kind of a quick reminder that when you look at the Russell that is kind of getting into the apex of that triangle, we're going to continue to watch that, but that resistance and supporters of coming closer and closer. We also talked about kind of the energy space, the financial space and then also really brought up kind of maybe two industrial stocks, their recurrence showing a continuation of longer term trend. I'm out of my time here

today, But tonight I'm going to be talking about both flags. Time on the virtual workshop here tonight. Also stay tuned for our next webcast coming up right at the top of the hour. Thank you also can for answering those questions as well in the chat. Now, remember with what we discussed. We

talked about this. As for a demonstration for illustrative purposes only. I wish you a great day. Thank you so much. Take care. Make sure you go out

practice and paid money to build that confidence and actually learned how trans

2021-10-09 01:34

Show Video

Other news