ETSY 78-Minute Chart
LottoX members know that I trade momentum stocks, especially ones reaching new highs. I've never found luck in trying to pick off the top or bottom.
Instead, I make my bones following the trend.
And that's where my TPS Setup comes in, which is present in this chart.
Three components make up my TPS Setup:
- Trend - Swimming with the current is a lot easier than against it. Primarily, I trade stocks with strong trends, mainly in the bullish category.
- Pattern - Stocks with strong trends often take breaks before the next leg. Chart consolidation patterns help me to identify these areas.
- Squeeze - Since I primarily trade options, timing is crucial. The squeeze component lets me know when price action compressed enough to likely lead to an explosive move.
Going back to Etsy's chart, the white arrow highlights the clear uptrend the stock followed for the better part of a month.
Using the tops and bottoms of the candlesticks, the white lines draw a chart consolidation pattern. It illustrates price trading in a narrowing channel.
Lastly, the red dots at the bottom signal a squeeze, when the Bollinger Bands move inside the Keltner channel. Green dots signal when the energy is released.
Working off the 78-minute chart, I plan for the trade to complete within the week. However, the shortened trading week might throw a wrench in things.
Rather than trading options expiring this week, I might instead choose to take ones for the following week.
Whatever I decide, I'll be sure to draw out my logic and plans for LottoX members.
Overstock (OSTK)
Not too many stocks rise from the dead the way Overstock has. Yet, shares made a remarkable comeback after languishing below $10 and surviving a controversial CEO.
What attracted me to the stock this week is another...you guessed it...TPS Setup.
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