On Friday morning, when most of us were still coming to life with our first cup of coffee, traders were greeted to what were initially thought to be some positive developments in the Ukraine war.
Specifically, headlines like this one from Bloomberg News were making their way around:
But traders are smart enough to know a few things:
- Putin is a madman who is constantly seeking attention, especially from their “daddy,” the United States
- Putin is an evil strategist that knows the value of deceptive comments like these
- Price, as in the S&P 500, tells all.
To that last point, you can see from this chart of the S&P 500 that the news came at a time when the S&P 500 was still in the grips of a bearish price trend.
And not long after that headline, Bloomberg released this gem:
Now, there are some very smart folks on Wall Street that get paid a lot of money to create massive trading models that focus on wacky concepts like Fractal Efficiency and Chaos Theory, which basically study the ripple effects that random news events like these have on price action.
But I am here to tell you that, in reality, simplicity is best when it comes to crap like this, and your ability to read a simple trend is all you need to know about where price is heading.
The Professor, Mike Parks, who is Raging Bull’s Senior Training Specialist, delivered another great watchlist to our members on Friday, and now I’d like to share that list with you.
If I have said it once, I have said it a thousand times, if you don’t like the way the market looks, find stocks where the price action makes sense to you.
If you like buying stocks in an uptrend, Mike Parks has found a couple of interesting trade setups.
Mike is a veteran trader and educator and is adding a level of insight to Total Alpha that can only come from decades of experience in trading and market education.
He is incredibly knowledgeable on all things markets and his talent for teaching new traders how to use market signals to choose the right options strategies is unmatched.
Mike’s trades heading into next week are as follows:
Bristol-Myers Squibb Company (BMY)
There is a squeeze on both the 1 hour and daily timeframes setting up. This is telling Mike the bulls are remaining in control through the squeeze.
He also likes the “bull pennant” that is forming.
When these two technical developments combine, there is support for the overall trading idea.
Mike is looking for a breakout to the upside and targeting the upper Fib Extension levels for exits.
Mike’s Trade Details:
Buy 18 Mar $67.50 Call
Schlumberger Limited (SLB)
He is also eyeing a bull pennant in SLB.
As oil prices continue to rise amidst the conflict, both Mike and I are expecting this entire industry to continue higher.
From a technical viewpoint, Mike is looking for bullish confirmation before entering this trade.
He wants to see the stock push above the upper resistance line of the pennant, when he will then target a rally back to the March 8th high of $45.08 or further to the 127.2% Fib Extension level.
Mike’s Trade Details:
Buy 14 APR $42.50 Call IF the stock pushes above $43.65
To YOUR Success!