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Full Time Profits, May 30th 2017 – BIDU, AAPL, TSLA

May 30, 2017 By Steven Place

One shakeout was all it took.

About a week ago, the market put in a 5 standard deviation move to the downside.

A volatility pivot.

Normally, when we see this, we tend to see a retest of the lows on less momentum and volume.

This time we didn’t. In fact, it was just a short time until we hit new highs… without any kind of pullback at all.

By all accounts, bullish action. So the gameplan is to look for rotation in relative strength stocks that have not yet moved.

Trade #1: BIDU

The longer term setup for this stock looks great. It has been consolidating for well over a year, and continues to show strength in the spite of some shakeouts. I’m looking for any kind of retracement for an entry point.

Trade Setup

Expected Price: 187.50

Sell to Open BIDU Jul 175/170 Put Spread

Tier 1: Enter at 0.90, Exit at 0.30

Tier 2: Enter at 1.20, Exit at 0.90

Tier 3: Enter at 1.50, Exit at 1.20

Trade #2: AAPL

AAPL hasn’t seen new highs over the past 2 weeks.

Why?

Because much of the “hot money” is chasing AMZN and GOOGL on their way to 1,000. It’s not a fundamentals issue, it’s a market structure problem. As AMZN and GOOGL run into 1,000, expect some of that money to rotate back into other large cap tech.

Now here’s the thing. At current prices, you’d probably be fine getting long the stock. But I’m sitting here and pricing out the spreads, and quite frankly the risk/reward isn’t there. We’re forced to wait for better prices… if they don’t come then we have to move on.

Trade Setup

Expected Price: 146

Sell to Open AAPL Jul 135/130 Put Spread

Tier 1: Enter at 0.60, Exit at 0.20

Tier 2: Enter at 0.90, Exit at 0.60

Tier 3: Enter at 1.20, Exit at 0.90

Trade #3: TSLA

This is a breakout setup, and there’s enough premium available to enter at current prices… we’ll simply run a stop and not add a third tier.

Trade Setup

Expected Price: 325

Sell to Open TSLA Jul 285/280 Put Spread 

Tier 1: Enter at 0.90, Exit at 0.30

Tier 2: Enter at 1.40, Exit at 0.90

No Tier 3

Stop out on a close under 285

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