Eaton (ETN) Long-Short PlayThe time frame is the daily time frame for this trade.
If the stock closes at the contested zone on the higher side, initiate the trade and close the trade at the stop if the daily price closes above $110. Sale zones are highlighted in yellow to close the trade going into resistance at key price levels.
Can leave trailers on if the stock blows past the resistance zones on a profitable trade, but take 3/4 of the profits off the table to keep it as a profitable trade at that point.
Green Vertical Line:
Date the trade becomes in play, after earnings on Tuesday, November 3rd. Earnings for other companies have experienced drops the weeks prior. Took risky to be in before earnings announcement or a potential contested election on Wednesday. Will have more clarity on whether this is a trade on not on Wednesday afternoon or Thursday Morning.
Orange Lines (Dividend Dates):
Ex-Dividend is November 5th, which means risk for assignments on the credit side, so this will be a debit play.
Dividend is paid out on November 20th.
Expect directional pressure on those dates indicated by the arrow direction due to the dividend announcements.
Risk-Reward Ratio Short: 7.58
Risk-Reward Ratio Long: 4.64
ETN1/N trade ideas
Eaton Corp Breakout tradeEntry level $93.42 = Target price $101.28 = Stop loss $91.37
Indicators all in bullish trajectory, while volume is very impressive.
P/e ratio of 16 is below average, some value remains.
Company profile
Eaton Corp. Plc is a diversified power management company, which provides energy-efficient solutions for electrical, hydraulic and mechanical power. It operates through the following segments: Electrical Products, Electrical Systems and Services; Hydraulics; Aerospace, Vehicle and eMobility. The Electrical Products segment consists of electrical components, industrial components, residential products, single phase power quality, emergency lighting, fire detection, wiring devices, structural support systems, circuit protection, and lighting products. The Electrical Systems and Services segment consists of power distribution and assemblies, three phase power quality, hazardous duty electrical equipment, intrinsically safe explosion-proof instrumentation, utility power distribution, power reliability equipment, and services. The Hydraulics segment includes hydraulics components, systems and services for industrial and mobile equipment. The Aerospace segment is produces aerospace fuel, hydraulics, and pneumatic systems for commercial and military use. The Vehicle segment engages in designing, manufacturing, marketing, and supply of drivetrain and powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance and safety of cars, light trucks and commercial vehicles. The eMobility segment designs, manufactures, markets, and supplies electrical and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. The company was founded on May 10, 2012 and is headquartered in Dublin, Ireland.
Long-term trade plan EAT
1) buy first part of position by <68$ - about 40% of plan
2) additional buy by <64.5$ - about 40% of plan
3) additional buy by <60.5$ - 10% of plan
3) the rest part can be bought by <54.5$ - 10% of plan
I'm confident about the first two aims of price since it is the required Fib correction levels of all growth starting with 46.5$. The target aim for new wave of growth is above 100$, but I guess it should be much more. The period of investing 1-3 years.
Weekly H&S sign of the timesETN is a strong stock judging by it's excellent income statement and balance sheet. Improvements YoY stay in line with the Warren Buffett criteria for buying a company. This company handles improving energy usage, and let's face it, that's super important. This could be a stock that sees a huge upside, for now the target is around $85. I would assume that it would retrace a little more with the other US indices and be on sale later this summer. It seems like it was a hidden gem earlier. People interested in the electric cars were hot on it last couple years. Now BTC is hot topic and ETN is tossed aside, but this company could have its foot in the right door for a lot of reasons. It looks like a possible head and shoulders forming, to take advantage of lower prices.