WULF is setting up for one of the cleanest pre-earnings momentum trades I’ve seen in a while. It has 32.5% short float, strong upside momentum, and it’s approaching new highs. This is the type of setup that often forces short sellers to cover before the earnings report hits (this one is on May 7th). And, guess what? These options are still relatively affordable.
Markets have seen a very strong week, adding to gains from the prior three weeks. The news flow is good and the technicals are even better. Everything I would look at would imply this is a regime shift and that bulls are solidly in control and will remain that way. There is only one technical pattern that might cause them a problem. For now, everything is aligned in the bull camp from the indexes, to credit, to dollar, and oil. The only new thing is reviewing whether semis (which are the most important part of the market) went too far too fast as of today.
Here’s why traders should ignore the news headlines and focus on technicals, especially with the put/call ratio dropping into extreme bullish territory. Upside may be limited, with SPX likely to get stuck in a range. Or… is it due for a mild pullback before targeting higher fib extension levels?
