Daily Profit Compass October 16

Tickers discussed: SPY QQQ IWM  FATMAAN names, TECK, AYX, DKNG, LYFT, FSLY, VRTX

The Daily Profit Compass provides a technical review of the stock market today. Key levels and trading locations for the indexes are provided, along with trading plans and timely commentary to keep you on the right side of the trade.

Earnings 

Shake, Rattle n Roll 

• Note:  Today is October OPEX so please review your holdings and deal with any positions expiring today to avoid unwanted assignment.
• They’ve shaken the tree fairly hard over the past few days letting participants know that the VIX at  27 means vol risk is still out there.
• Still the pullback has been contained thus far for the most part and the charts of the indexes and FATMAAN names remain constructive.
• What would change that is if price were to break below yesterday’s lows. Then a more bearish view would emerge
• With the election a little more than 2 weeks out, we are still subject to elevated headline risk
• Not a time to have MAX exposure long;  keep positioning to the light side and lean on your trading abilities to ride the vol waves as they present themselves.

Market Snap Shots

Trade Ideas

$TECK

TECK Resources has been benefitting from rebounding commodity prices and overall dement. Price is in a bullish falling wedge and just needs a nudge to break out. Set you alarm around $14 and take it long on the signal. Reaching the prior 52 week highs should not be a problem if the market stays constructive.

$LYFT

Ride shared LYFT has been in a downtrend all summer despite the broad market doing quite well. Now price finds itself at key support with little structural support below to ease a break.  Earnings are the first week of November. I started a small short position in the Nov 25.5 PUTS. Needs to break quickly for the trade to work. Price falling below $15.25 should speed the down move. Set an alarm there

$DKNG

The zone between $42.50 – $45 is setting up as an important trade location. A hold offers a nice low-risk, objective long entry.  Should $42.50 break however and the stock becomes a short with a target of $30 at the low end of value.  Set yourself a could of alarms and add the name to your watch list.

$FSLY 

As we discussed, the name sets up well as a bracket second day play.  Alarm the range noted and then follow price either higher or lower out of the range.

$AYX

Massive gap begging to be filled. Follow the annotations if interested.

$VRTX

Vertex got whacked with a combo punch of a drug trial being halted and a downgrade.  From a technical standpoint price stopped on a dime at the high volume / price support bar.  What if we got long with a $5 stop below yesterdays low at $210. A move back to the 200ema is $40 higher. A complete gap fill is $60 higher.   I love the R/R there.  And hey, if we get stopped out we’d still have an objective short.   VRTX is a quality name.  While it may be soggy for a few sessions, I fell we have a good technical set up for a long.

INDEX CHARTS

Market on Close from last night. 

Spent a solid 40min last night detailing the technical posture of  SPY / QQQ / IWM as well as all the FATMAAN names  FB/AAPL / TSLA / AMZN / GOOGL / NFLX.    Also covered were a few trade ideas and discussion of our open positions. Pre-market futures are flat so no technical changes since last night.

If you missed the video, watch it and you will be caught up on the technical posture of these key tickers.  Find the Market on Close video  ( HERE )

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