Last week I sent an alert to buy GOOGL calls…
This week they’re up 210%.
This pattern repeats in the market.
If you missed the most recent setup, don’t sweat it…
But don’t grow complacent either…
My Trade on GOOGL
Alphabet Inc. (NASDAQ: GOOGL) pulled back from its May highs and ground lower through the middle of July.
On July 29, it came down into the daily 200 SMA and bounced.
My alert went out at 1:27 P.M.:
- Long dated: Consider GOOGL — OCT 16 $375 calls (expensive)
- Plan: Wait for the pullback to $333 or consider the $338 breakout
- WHY: It did what it was supposed to do: Bounce off daily 200 sma
- Also has a BIG AGGRESSIVE call flow today.
- Has a gap above it to fill.
I gave two entries because a pullback to $333 would let patient traders in at a better price. Then the $338 breakout would confirm that buyers had taken control of the tape.
The stock chopped sideways for a session after my alert, then it broke out and ran toward $385.
Here’s the value of the contracts we targeted:
They jumped 210% in value.
How To Manage These Trades
My trade on GOOGL worked.
But nothing in this market is guaranteed, so the management matters as much as the entry.
Pay yourself along the way. I take profit in pieces as the contract climbs, and I never sit around waiting for a single perfect exit.
Once I have taken that first profit, my stop moves to break-even, or within $0.05 of it. From that point forward the trade cannot hurt me.
A long-dated contract gives us months of room, but that room turns into a trap when it makes you lazy.
Manage an October contract with the same discipline you would bring to a Friday expiration.
I am content with a few percent here and a break-even there. Traders who buy the biggest mover in the market and hold it until they get rich are gambling. I am running a strategy.
Use this process on the next stock that’s ready to pop.
Be good (and be good to others),
Ben Sturgill
*Past performance does not indicate future results. Not typical.
