Time to Get Long Cloud Stocks?

Dear — Jeff Bishop here, Software companies providing cloud services have been some of the hottest stocks to go public this year.  It's no surprise to me.  They're providing essential tools to help businesses organize and sift through massive troves of data that are now hosted online.  Jog your memory back to the week Snowflake (SNOW) went public back in October, and it's clear just how hungry traders are for profits. These stocks are in play, and while some traders are afraid to get into these highflyers and don't want to chase…  Especially after, SNOW reported earnings, along with Crowdstrike (CRWD) and Zscaler (ZS) on Wednesday. However, there are different strategies to use to jump in on the action. In All-Access today, we'll recap how things went down in ZS— and how to potentially make money on SNOW and CRWD from here… Yesterday's move of the day is ZS.  The company's impressive earnings report beat estimates by a wide margin.  Zscaler is a cybersecurity company, so it benefited from the pandemic after more businesses shifted their operations to the cloud.  Zscaler's revenue increased to $142.6M, adjusted EPS came in at 0.14 per share and adjusted net income was 20.06M.  The market was really excited about these numbers and ZS closed up 26.45% on the day. If you were aware of the earnings results before the market opened, you might have wanted to buy the stock.  Here's one way you could have done it: The most important thing to remember about this setup is that it is a breakout above all-time highs. For traders that means that there is virtually no overhead supply. On top of that, a fundamental catalyst behind the breakout, in this case, earnings report, makes this setup so much more powerful.  As far as executions go, sometimes you have to buy these on strength after the stock has already run up a little bit. That means you have to be responsible with your sizing for those situations when the breakout fails. Expect to see more of these setups during the next earnings season, especially if the broader market stays bullish.  Overall, a breakout above all-time highs or 52-week highs is an extremely powerful tool to have in your trading arsenal. It is safe to say that fortunes can potentially be made in this setup alone. Familiarize yourself with the chart above, so that you are ready when it presents itself the next time. As RagingBull's #1 IPO trader, Ben Sturgill was actually up on the trends and notified traders about big potential moves in these stocks the day of… If you were following along with him, you may have gotten a huge piece of the action that proceeded yesterday. ZS today is just one scenario of how a bigger picture chart breakout can play itself out.  The stock doesn't have to go straight up all day on day 1, and many times it doesn't.  It might chop at the highs first and then make a move on day 3, day 4, or later. It can also pullback, even dip slightly below the breakout level, and then run higher on the rebound and reclaim.  There's really no one answer as to what such a name will do, but one thing is for sure— keeping track of big picture breakouts can prove an invaluable tool and a great source of your trading edge.  Keeping track of breakouts to all-time highs— even more so, for a host of reasons: All-time highs are a sign of clear demand, greed, and positive risk-appetite among market participants There's no resistance and no limit to how far a name can go— it's all clear skies All-time high confirms the uptrend —and it proves you, as a bull, are right. After all, the trend is your friend, remember? Save the best for last: all-time high gives you a very clear risk level to trade against In short, you're buying a stock that has clear demand and support, you're doing so right as it begins to pick up its uptrend, you have clear and minimal risk below and unlimited reward above. Does that sound like a bad deal? Is that not something you want to be involved with? We do, and here are some of the names we'll watch closely: CrowdStrike (CRWD): This cloud cybersecurity company has a lot going for it: a strong organically growing underlying business, a hot industry— and, much like ZS, a beautiful chart. It shows nearly 3-month long clean consolidation at the highs and a potential breakout for the next leg If the stock establishes itself above $150, it is headed higher with next resistance at the whole number at $200. Snowflake (SNOW): The cloud-based data warehousing provider went public less than 3 months ago at nearly 3x its anticipated valuation. It hasn't disappointed since either— shares are up another 70% from the mid-September lows, and just this Wednesday the company reported its first public quarter, sending shares 16% higher. Shares are currently above the big resistance level of $300. It's bullish price action, just as long as the stock stays above what is now a reflection point. Short term price target is $450. SNOW and CRWD are still on Ben Sturgill's watchlist this week. Join him today to learn how he's potentially trading them. Take-Two Interactive (TTWO): The famed Grand Theft Auto maker may not be as exciting as the former two, but don't let it fool you— the stock has been consolidating at the highs cleanly for over 6 months now. It is now starting to move away and looks poised for another leg higher.  Any hold above $180 is bullish with a short term price target at $215. Seeing huge moves on hot software stocks— like SNOW, CRWD, and ZS— is enough to instill a huge fear of missing out.  But as traders, we also have to be careful about how we trade them. Look no further than the reckless way that most amateurs try to get long on their IPO days.  Since many of these IPOs are so highly anticipated, they get way oversubscribed.  Most retail traders can't even get in at the initial price, since those are reserved for clients of large brokerages.  Retailers who place market orders right at the open sometimes get filled at nosebleed prices, which can take weeks, even months to recover.  Look no further than the IPO of SNOW, which got 40 times oversubscribed. Many traders got filled at nearly 320 dollars per share, which is still just shy of all-time highs.  In other words, they waited 3 months to break even on their initial investment. Listen, we know it can be tempting to try to get in immediately on that salacious new stock that could turn out to be the next big thing. But we can't get mesmerized by the big moves on IPO day...  And with IPOs AirBnB and DoorDash coming up next week, we think it's important to keep this in mind.  As a professional, Ben Sturgill has developed an immunity to fear of missing out. Learn how Ben is trading IPOs differently than most others and how he nailed numerous triple-digit IPO wins just last month. 1,000% Trade – $50K – Here's How By Jeff Bishop of Total Alpha 3 Sectors With The Most Hated Stocks By Nate Bear of Weekly Money Multiplier  Gaining Valuable Insight from a Flag Pattern By Jeff Williams of Penny Pro How Team Trading Can Boost Returns By Jason Bond of Jason Bond Picks To Your Success,The RagingBull Team RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 Click Here to stop receiving emails from support@ragingbull.com Unsubscribe from all RagingBull emails DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at https://ragingbull.com/disclaimer. FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. 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