Place your bets!

2021-03-12 | Jack Roberts

The market is full of opportunity, so let’s dive in and I’ll show you what I’m talking about with the Top 3 names I’m following. My criteria is based on a combination of things, like a Squeeze on the hourly, 4-hour, or daily time frame. Best case scenario, all of these time frames align in perfect sync. Furthermore, I like a combination of a squeeze with green 10X bars showing high volume, high short interest, a larger fundamental argument towards growth, or it’s just niche’ and semi-unattached from the rest of the market, i.e. DraftKings (DKNG). Place your bets!

The reason I like DKNG so much is really because of two things. 1) It’s unattached to any other sector. 2) It’s sports betting, and sport betting is growing across the DraftKings platform faster than any other platform. Now, I said there were two things (those are just my two favorite things), but as a technical analyst, I can definitely see it doesn’t stop there. We have a Daily micro squeeze that you can be early to if you want to buy it with me (I’m already in the 70 calls into the Fall). But you can also note that DKNG has really really good volume pouring into not only the March monthly’s, but also the April expiry as well. By the time you read this, DKNG may have gone up or maybe just stayed at the 78.6% Fibonacci extension above $68.35. Either way, this is more of a long-term approach with a combination of delta 40 calls and slightly more ITM calls at the delta 70. This morning (March 11th), it’s up 2% and that squeeze is looking like it will fire soon. Remember, this isn’t a name that is connected to tech, which is great. I need some honey-badgers in my life and DKNG fits the model for momentum and something I can be long in while (big if) I might want to short the indexes at the same time. I could honestly go on and on about DKNG, and I just feel like I’m early to the move that takes us into $100.

The reason I like ETSY is because I like the general trend, and if you look at the 4-hour chart, we have a fresh new set of green 10X bars in a very bullish trend. The spread isn’t fantastic, but I’m still fond of the idea of buying at the money calls or selling deep in the money put credit spreads into the Fall. Folks, I am typically attracted to ETSY after a strong pullback and that is exactly where we are. I could go on and on about the technicals but honestly, I don’t need to. It’s basically the same idea I had about SNAP last year when I said it would go straight up after the numbers in India were realized. SNAP is huge in India and I expect that one to go crazy one more time, as well. Today, it still has a squeeze and it’s finding support above the 50sma.

About 3 months ago, I was talking to a long-time trading friend and the conversation revolved around commodities. The question was, “what are we doing about gold and silver”? I replied, “nothing, I’m focused on copper and Nickel” (many different ways to play this one – i.e. FCX and VALE or any of your favorite commodity leaned ETFs). I had been shouting to the heavens specifically about copper last year and I’m ready to reload the boat on another pullback. The argument behind nickel is to support the argument that all these new batteries being made are heavy with nickel, so the long play on nickel makes perfect sense. Once again, not extremely technical, but I don’t need to be technical here.

Check out the chart below, look at all those higher time-frame squeezes! It trades decent volume and I generally don’t like to be short a name that is connected to any commodity that I am very long on, that is to say I think coffee goes much higher from here. There are a lot of obvious “supply and demand” arguments here. But I am more focused on economical whiplashing into recovery mode, for the next year. Which equates to more expensive coffee being consumed. The supply end of things could get even more interesting as coffee was basically put on hold in a lot of places and vendors are still holding on to millions in inventory. I think of this as a short squeeze. A lot of pressure halting the upside, but once it goes, it really goes.

It truly is an amazing market right now, and just a reminder the Nas-crack (/NQ) is just insane right now, but try not to read into it too much. I often feel like traders have to pivot once something “drastic” happens, which this is clearly not the case. We are in a wild market – that’s the one truth! If you are seeking help from your peers, I can relate. Quite often I listen to David Starr on Elliott Wave analysis and his Voodoo Lines in general if you need a sense of direction. His experience and careful eye sees through the BS that the market can feed us sometimes and I truly appreciate the “hands-off approach” to gain a larger perspective. It’s been helpful to listen in on his analysis after these major swings in the nas-crack. But hey, I gave you my short list of things I still want to be long in. Let’s see how it goes.