In this post:
- What are the two tech-giants that have continued to trade sideways?
- What is the focus of $AMZN & $FB?
- How many put credit spreads are there for the March monthly expiration?
As the market has continued its bullish trend over the last few months, we’ve seen many stocks benefit from this momentum, making impressive moves alongside the indexes. While $MSFT, $GOOGL, and (at times) $AAPL have all seen strength in recent months, there are two tech-giants who have continued to trade sideways: $AMZN and $FB.
While the chop that we’ve seen from $AMZN and $FB can be difficult to trade on a short term basis, these kinds of setups can lead to powerful moves once they finally start heating up. Look at $NVDA as a recent example: months and months of chop in a weekly squeeze, before finally rallying 15%+ in a few days. If you can navigate and hold through the choppy action, you can put yourself in a position to bring home some great profits once the move finally begins.
For $AMZN & $FB, they are both currently squeezing on the Weekly, 3 Day, and Daily time frames. My focus here will be on the weekly squeezes, looking to slowly build a position for a move to the upside over the next few months.
For $AMZN, I already have a few put credit spreads for the March monthly expiration, and will be looking to add more should $AMZN continue to hold above its weekly 21ema. For $FB, should it continue to close above its weekly 21ema, I will look to start selling put credit spreads (with short strikes under the weekly 21) for April expiration.
It’s a simple mindset. In a bullish market, stocks that have been building tremendous energy on the weekly time frames are likely to release that energy to the upside. With a bullish structure to these weekly squeezes, we can stack the probabilities of profiting in our favor even more with the utilization of a put credit spread. Keep in mind, during a weekly squeeze, lower time frames can be choppy and nothing but “noise”. Ignore that noise, and be disciplined to hold your position as long as the bullish structure of the weekly charts remains.
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