Our focus over the last few weeks has been the multiple squeezes setting up in names like AMZN and AAPL, both of which have squeezes on the weekly, 3-day, and daily time frames. So far our focus is paying off as both stocks pushed aggressively to the upside this week, both officially firing their daily squeezes.
When there are squeezes setting up on multiple time frames, our goal is to get positioned as close as possible to the buy zone, the 21 exponential moving average (EMA). This allows us to sit back and watch as the squeezes fire, one by one, as opposed to having to chase the stock once the move begins.
With weekly squeezes setting up on each, our targets for AMZN and AAPL are the +3 average true range (ATR) extensions on the weekly chart. For AMZN, this lines up around $3,900, while +3 ATR on the weekly chart for AAPL is closer to $165. Our put credit spreads on each have collected more than half of the max potential profit, and we are looking for continuation to the upside next week. In the event the moves continue quickly we should be in great shape to get filled on our exits for 85% to 90% of the max profit.
In the spirit of getting long, strong trends at the buy zone, we also entered a December monthly expiration put credit spread in TSLA, which recently pulled back to its daily 21 EMA. On this setup we are looking for continuation of this crazy trend with a move back to the previous highs. The put credit spread that we sold offered a 2:1 risk-reward ratio. We can comfortably hold this all the way down to the daily 50 SMA if needed.
Find a trend, find some squeezes, and work your entries wisely. That’s the simple game plan that has served us well all year and we expect it to continue serving us well into the end of the year.
In the Sunday video we’ll take a look at our open positions in NFLX, AMZN, AAPL, and TSLA, along with a few other spots that are looking poised for higher prices. We hope that many of you have taken action on the ideas mentioned here over the last few weeks, and we’ll talk to you on Sunday in the weekend watchlist video!
Stay Focused!