TTD 195-Minute Chart
Spend a few minutes before continuing on and jot down a few notes about what you see in the chart.
Now, I'm going to explain why I like this one so much.
Using the 195-minute chart, where each bar represents half a trading day, I find all three elements of my TPS setup.
- Trend - Take a look at the black arrow. It guides your eye along the bullish path this stock took over the last several months. If the drawing wasn't there, could you still spot the trend?
- Pattern - Connecting the highs and lows of the candlesticks, the black trendlines slowly converge at a point. This consolidation pattern comes after a strong move higher, creating what I call a period of rest.
- Squeeze - What comes after a period of rest? Movement of course! Red dots at the bottom tell me the Bollinger Bands indicator moved inside the Keltner Channel. It's a signal that shares might be gearing up for an explosive move.
In the headline of this trade idea I noted the short float.
I like using stocks with high short float in bullish uptrends for my trades.
You see, higher short floats mean that more traders bet that the stock will go down by borrowing shares to sell them.
As share prices rise, their losses grow. At some point, the broker forces them to close their trade to stem the bleeding.
To close the position, these traders buy back shares, which guess what, sends the stock even higher.
This creates a cascading effect of more and more traders forced to close out their trades in what's known as a short-squeeze.
Since I'm working with the 195-minute chart, I like buying call options into the September monthly expiration.
However, they cost a lot of money, even for ones way out-of-the-money.
So, a cheaper way to play the bullish behavior would be to sell a put credit spread. This defines my risk and reward.
Nasdaq 100 ETF (QQQ)
These next two trades are really interesting because they come off major index ETFs.
Unless you've been hiding under a rock, you know that the tech rally has been nothing short of epic.
Stocks like Apple (AAPL), Amazon (AMZN), and more continue to break records every day.
Yet, there might be one last move left in this bad boy.
Take a look.
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