These 6 stock market trade ideas are either immediately actionable or near actionable set ups with triggers near by. For each trade idea, I give you levels to alarm for entry, potential targets, and other key information to glean from the charts.
What are “Objective, Low – Risk ” Trade locations
Central to my trading process is finding objective, low-risk trading locations. In essence, I want to find trade locations where there is a clean price level to shoot against and where a violation of that line clearly shows me when I am wrong. THe low-risk part of the equation is to take a trade close enough to the price level that the reward is at least 3x the risk. Typically this means shorting into resistance, going long at support, going long a breakout, going short on a breakdown etc.
$FDX FedEx Weekly
By now you likely know that FedEx had yet another big whiff on its earnings with both a top line and bottom line miss coupled with a 2020 guidance cut. The market reaction has slammed price back to key support at $150 where there is a huge ledge of support. How price behaves in and around this level will be key. A break below and price enters an area of sparse volume / price support and should head toward the 2016 lows near $118 / $120.
Trade Strategy: With price below $150 at the close of the week, on Monday I like the idea of looking out to November and targeting the $145 strike puts. Give the trade time to start working and closing out before the next earnings report. If you’re adventurous and are willing to take on added risk, feel free to look out to January. That will capture the next reporting period.
The longer term target is $120 while the stop is a weekly close back above $150.
$HUBS Hubspot Daily
$HUBS is at a perfect binary trade location that I love to find. Price is sitting on long-term support at $160. Support is support until and unless broken so the benefit of the doubt is with the bulls.
Trade Strategy: Let the FOMC noise clear. If you’re bullish on the name, get long here with a tight stop below $160 and kill your trade if price violates your stop. Bears: set an alarm below $160 and wait patiently. On a break of $160 get short against $160 with a stop just above. Downside targets are approximately $145 then $120 near or at the December lows.
The beauty of these set ups is that you’ll know immediately if you’re wrong ( or right ). Check the stock for earnings dates when your trade triggers.
$KEYS- Key Sight – Daily
About a month ago, $KEYS popped with a powerful gap. Since then has been moving within the initial trading range from the gap day. Now price is beginning to emerge above the range and breaking out. Additionally the ema’s are bullishly stacked and the RSI /PPO indicators are bullishly positioned and are supportive of a move higher.
Trading Strategy: No need to get complicated or fancy. Get long against the breakout at $100 with either common stock or via options. If choosing options, I’d look out to at least October and look for an at the money call. You can put on a call spread if you like. I’d go $10 wide. Maybe a Oct 100/ 110 call spread. A spread will reduce your capital outlay and dampen volatility but also cap your gains. We are at all time highs so there are no natural sellers. I’d pencil in $105 as T1 and $110 as T2. Set a stop below $100 according to your risk tolerance.
$OKTA OKTA Software – Daily
Another name sitting on the Mendoza line where high volume / price support and the 200ema converge neat $104. A perfect spot to use as a bull / bear pivot point. The indicators are weak, but you’d expect them to be after a $30 rug pull in just a few weeks. Bulls are still in control because support has held thus far but if $104 fails, then $85 comes up fast as price moves through an air pocket on the chart. You’d expect bulls to really defend this area.
Trade Strategy: Bulls, get long right here, right now. As long as $103 / $104 holds you’re making a value buy at the optimal trade location. Look out to at least October with at-the-money calls. Target a bounce to the 20ema as T1, and the 50ema as T2. T3 would be the pivot point back up near $130.
Bears need to alarm $102.50 or near by to get short. Target $85 with at the money puts. Depending on when you get the trigger, go out at least 30 days to give the trade time to work.
$MO Altria Daily
Tobacco name Altria has been in a persistent downtrend since April and has dropped 26%. Now price is pressing against key support at $41. The height of the large triangle implies a downside measured move of 26% on a break of $41. As a side note, Altria paid a ton of money to buy a 35% stake in Vape company JUUL. Vaping products have come under extreme scrutiny for health issues, and just today NY state banned flavored vape products. Expect many more states to follow with the possibility of a federal ban on those products. This may be a contributing factor in the price slide. It should be also noted that $PM and $MO have supposedly discussed merger talks but nothing has emerged other than gossip.
Trade ideas: If a potential merger between $PM and $MO concerns you, don’t take this trade. If you can get past this risk, take a small short position with lunch money against $41. Go out 30 to 60 days and give the trade a chance to work. If you’re bullish you should wait until the downtrend line is taken out. That would represent a trend change with the potential to spark a longer- term durable rally.
$DHR Danaher Daily
Medical equipment maker Danaher has been consolidating within a fairly tight range for the past 3 months. During this process, price has been bumping against $144 over head resistance. I think there is a good chance that the stock breaks out ahead of earnings due out October 16. The measured move is projected to be between $6 – $8.
Trading Strategy: Alarm $144.50 for a breakout. If / when it triggers buy October $145 Calls and hope for a pre-earnings run into the print October 16th. I would exit the trade before earnings.Set a stop just below $144. I think the stock could run $5 ahead of earnings assuming it breaks out soon.
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Notes:
The charts are and levels are provided as well-informed guidelines. That said, please be aware that exogenous events like surprise tariffs or other events can easily move price through support / resistance zones.
Also, set you stops according to your own risk tolerance. The ones I have provided are to be used only as a guide. The most important aspect of your stop is to honor them. Some trades work, some don’t. Honoring your stop will ensure your loss on a failed trade will be minimal.
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