Magnet Trade in MA

[Steven Place]

There’s a couple things going for this stock:

1. Failed breakdown on April 1st. That candlestick violated a handful of “support” levels, causing traders to get stopped out and stronger hands to buy the stock on a stop run.

2. Mini “flag pattern.” Over the past six days, the stock has been in a very tight range. Any attempt to drive the stock lower has been met with a lack of sellers.

3. Magnet level at 92.50. There is an obvious double top pattern from late February that many investors are anchored upon. I expect the stock to trade up into that level as a magnet.

Here’s the execution strategy:

1. Once the ask at 89.50 is taken out and the stock trades above that, buy the May 90 calls. The price will be around 2.15.

2. Stop loss at 87.81.

3. Take half off at the first target of 91. If that happens you can hold through earnings without a ton of risk.

4. Convert the trade into a vertical spread by selling the may 95 call once we test the double top levels.

[Steven Place]

Stop was hit on Friday, if yo missed it then today’s bounce is a gift to bail:

Sell to close MA May 90 calls at 1.18

42% Loss on max risk

[Steven Place]

Also, if MA closes above 89.50 i’ll play it long again.

[Author]

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