
The Tech Stock I’m Watching for a Potential Trade
By: Steve Smith
The past few weeks have been a tough trading environment with major indices quietly grinding higher. However, there’s been plenty of turmoil in individual names — under the hood.
Yesterday, I shared how I established a bearish position in the S&P 500 Index (SPY) using my patent-pending “triple play” strategy which makes use of weekly expiration dates. With today’s roll, the cost basis is down from $42.90 to just $0.30, giving us a bear-free trade of significant downside exposure,
With that in place, I’m starting to look at names for establishing bullish positions. As you can see in the chart below, Tuesday’s sell-off looks like just another one-day blunder by the bears; a spike lower which held support closed at the high and is extending gains today. Sorry Boo Bear, but El Toro is back in control!
With that said, my watch list is now filling up with buying opportunities. A top name, and one I haven’t traded in over two years, is Netflix (NFLX), which took a post-earnings dive despite good numbers.
If it can hold the $500 level over the next few days, I think a quick rise to $520 is the cards.