Hi Shoppers,

I have two super-cheap shots for you today.

They are based on my favorite Japanese candle formation, the doji.

You love to see it.

First, let’s have a quick review of what a doji is, exactly.

The doji is my favorite because it can be found at the top of an uptrend and at the bottom of a downtrend.

 

It signals the possibility of a change in that trend.

 

It looks like this:

 

 

 

The doji has a very small or nonexistent real body (the red or green part) and an upper shadow and a lower shadow (white lines).

 

The real body is created by the difference between the opening and closing price of the session. 

 

It can be red or green.

 

The upper shadow is formed by the high of the session and the lower by the low of the session.

 

The doji looks this way because it represents the buyers and the sellers in the market equally, meaning neither side has taken over.

 

So, when found at the top of an uptrend or the bottom of a downtrend, the doji is signaling doubt in continuing that same direction, causing people to not add to their positions and/or cover their positions, stopping that trend.

 

Most importantly, if you spot a doji, be sure to wait for the confirmation the following day.

 

A confirmation is the underlying opening and trading in the direction of the reversal.

 

Also, wait for the underlying to trade for at least an hour after the opening in that direction.

 

Continue here for the two cheap shots using dojis.

 

Double the Doji

 

My first cheap shot is in Ginkgo Bioworks Holdings (Ticker: DNA):

Yesterday’s candle looks like a doji.

Definitely wait for the confirmation of the stock to trade higher

I think DNA can trade back to $3.25, and possibly $3.75.

Looking at the options, the Sept. 16 3 calls are $.20-$.25:

I like this as a super-cheap shot for this stock to trade higher.

My next doji is in Zomedica (Ticker: ZOM):

Monday’s candle formed a doji and we have confirmation with the stock trading higher yesterday.

I think this stock can trade back up to at least $.42 and even higher.

I would pay $.27-$.28 for this stock.

Trade Review

The Energy Select Sector (Ticker: XLE) and the crude futures have definitely broken out and I paid $1.15 for Friday’s XLE 82 calls.

Next levels of resistance are $86 and $89.

Thanks for Reading … See You Next Tuesday.

Licia Leslie