We had a quiet day yesterday, with one clear winner: $TSLA. What a ride it had! It went against all the odds in the downtrend of September and October, and it smashed all expectations, reaching dizzying heights and hitting 1 trillion dollar market cap. In the afternoon we waited quietly for Tech to come to life, and see the reaction to $FB’s earnings. The social media giant missed on revenue as expected, but beat on earnings. The negative news was most probably already incorporated in the stock value, and therefore the stock value jumped higher in the after market. We also had another quiet but steady participant in yesterday’s action: the small caps. The Russel proved to be quite strong but is still in the channel, therefore you need to be careful there. Today we have futures up, more so in the $QQQ than in the $SPY, which may push this bullish action a leg higher.
Let’s start with the star of the day, which not only made a new all time high, but it went all the way to $1045, 135 dollars over the previous high. I am glad I rode this stock until its highs, but now I am out of the stock and option calls, maximizing my profits. In order to be cheeky and because it is terribly extended I bought a bear put spread, for this Friday, hoping I could take advantage of the digestion period. If it does not go down my loss is defined. Remember this stock has the 8 day all the way to $900, the previous high at $910. Do not chase it now, and wait for digestion.
I added to my small caps positions since I saw the strong action in the Russel, and today it should be the day it comes out of its channel. $229.84 is the number at which the cup formation is complete and a handle should form towards $233.64. If the small caps index is strong your small caps will profit.
I have to include this stock for today in order to prepare you for trading it today. For a bullish move $FB should open above $332.27 (8 day EMA), move past its 21 day and get and stay above $342.36 (100 day EMA). If you have this kind of move $FB is in recovery mode and should be buyable with a stop just below the 8 day.
Today at the market close we have $GOOGL and $AMD earnings, which will be pivotal for sentiment. The microchips are the backbone of tech, and earnings should be beat in order for this stock to make a new all time high. For $GOOGL if it shows it is not affected by $AAPL’s privacy policies, it will most probably jump towards $2900. Remember: take no stock into earnings, just call options! Risk is defined!
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