BY ANDREW GIOVINAZZI
September 15, 2024
Yo Pit Crazies,
This stock market got you crazy? Up, down and all around? It might be easier to just trade the direction that it is going. Try it out.
Like I said, stocks do crazy things. The stock market is very much like a fashion show. Do you remember the hottest stocks of 10 years ago? Zynga inc (Ticker: ZNGA) or 3D printers taking over the world? Yeah I thought so. 3D technology could end up doing huge things, likely already is, but has been consumed by bigger companies.
That is the fun of investing and trading. My Grandma Mary’s favorite line, “You never know.” rings in my ears. When some stock is doing one thing, it can change its mind and do another.
Broadcom Inc (Ticker: AVGO) is a case in point. The Great 8 stock, Mark rightly included AVGO in the Mag 7, did not have perfect earnings, got smoked, and now is higher than where it was before earnings. I had it on my list to buy at levels around $125 but it flew and I did not get the chance. I did not make a trade and feel the short term opportunity is gone. Maybe I’ll get another shot.
AVGO 1 month chart with Sigma Implied Vols.
So AVGO goes back into the process. Investing using options is a process.
How do you get started?
Start with a list of stocks
I have Mark, Licia, Frank and Griff which helps but I also read a lot. I use big money flow and I like stocks that make 52 week lows. I do not buy 52 week lows, I just add them to the list. Note that any good company can make a 52 week low. I do not buy momentum stocks but I think they make great two way trading vehicles.
Below is Portillo’s Inc (Ticker: PTLO) that we featured in The Ticker Highlight show a couple of weeks ago and the calls we bought are starting to perform. This is not a short term trade but a stock I think can double in two years I just don’t want my options to expire before it moves.
PTLO 1 Year Chart
At some point, if the market likes Portillo’s like a new handbag, it gets a bit more of a growth multiple and the thesis is realized and I can sell my calls. Hot diggity dog!
Stay tuned for more on this exciting prospect!
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain