Week of 7/9 WatchlistStocks I am watching this week for a possible swing. Thinking about posting a daytrading watchlist but I contstantly add and remove tickers.
Not financial advice just my opinion.
0XWG trade ideas
IQ Apparently in Wycoffian Terminal Shake Out (compare Silver)Introduction
Bitcoin's recent markdown has put Wycoff and Distribution on a lot of new traders radar as well as investors who have not had to deal with this kind of pattern recognition. There were a lot of people that thought that it looked too picture perfect so disregarded it, Guess what? They were taken the most by surprise and I know what it is like to be there because I was there 3-4 years ago when I had problems believing in TA because so much of it so so bad.
That leads to good news on IQ as IQ appears to be in Terminal Shake out and it is looking picture perfect. I have marked out the lower end of the action and have left the top alone because I think the indicators have done a good job showing that resistance. The volume on the final stage of the shake out is lower than what took us edge to edge on the bollinger band and value VPVR value area and this low volume helps us see that sellers are approximately exhausted. Another way to confirm the fact that the selling was relatively low volume is the Value Area did not move down. Much like a slow but persistent sell off can slowly bend a bollinger band lower and lower it can also drag the value area down.
I have been watching IQ for a couple of years now and have a couple of posts. My last post was bullish and I was going to update it when I bought some calls and I never pulled the trigger. This time is a bit difference. I have the stock and I have some OTM calls already on the books. It might go lower somehow but my entry this week is pretty solid for a long term hold and I hope to trade the options like a degenerate.
Indicators
I have put the monthly bollinger band on the weekly chart to show that price actin has gone below the monthly bollinger band. That is a very solid entry point if you generally have any faith in the long term outcome of an asset. Price has also gone below the Volume Profile Value area which contains +/-1 standard deviation of volume by price. When price goes out of the Value Area to the downside when it recovers you often see price actin go coast to coast and end up at the top of the value area. If price action is as bullish as I expect price can hop out of the limits of the BB and VPVR Value area as you can see in silver. From there price would enter into a multi-month re-accumulation.
The On Balance Volume with EMAs also has a bollinger band that I often don't show in my posts because if it isn't needed it just adds visual distractions. But the circles have shown times were a green week after a massive sell off has kinked the OBV at the bollinger band and price action has recovered. If you look at the second blue circle you can see how above the Volume Profile Visible Range moved down. That means the sell off hit a tipping point and was significant to move the whole visible range down roughly $5. That VPVR has not moved down in such a serious way with this dump.
Silver
Below is silver with the bollinger band and VPVR during the "Covid crash" and we can clearly see that buying with price action below both was a fantastic entry for a trade or investment. You should have the tools from the main chart to see all the key points of Accumulation. And I roughly expect something similar to happen with IQ. A rather quick move to or above the Point of Control and then a massive spike in price. I have not used the On Balance Volume because silver futures are a different beast with a different history.
Fundamentals and Conclusion
I think IQ has a very strong chance of behaving like silver did after its dump, so I bought some. Silver sold off for no good reason, as it didn't lose its industrial or intrinsic value and it is not like you can spread a virus by contaminating a silver mine and IQ sold off because some over-leveraged hedge fund degenerate couldn't answer his margin call, his stuff got liquidated and the momentum traders took this way too low. There was earnings a couple of days ago and it seems that the company can turn a profit within like, 5 years. Look at Facebook and Netflix below and how long it took these companies to have their stock clear the high of their first month of public trading. There is going to be a shake out off the weak hands. My only concern is a rout in tech stocks could take this lower but so far it is doing well.
$IQ Technical Analysis$IQ Key Levels
Key Supports: White
-$14.09
-$15.50
Key Resistances: Yellow
-$17.43 (Point of Control)
-$23.15
-$29.18
White Rectangle & White Circles on RSI: Demand Zone / Accumulation Phase. Best Area to Buy
Yellow Rectangle & Yellow Circles on RSI: Supply Zone / Distribution Phase. Best Area to Buy
Sell an IQ strangle in May with this pop in volatilityHello options sellers. I've decided to try and post some setups that I like, starting with a position IQ. NASDAQ:IQ saw a substantial drop in price lately, and with that drop in price came an elevation in volatility and IV Rank. It seems to have found some support around here, so I'm looking to take advantage of this pop in volatility and higher option prices by selling a strangle with May expiration.
For this trade setup, sell the May 21st (Monthly) 30 delta PUT, which is currently at $15. Then also sell the $25 CALL. You can collect about $138 dollars for this strangle.
The position is leaning long, with Delta of 17, and a probability of profit at 65%. The probability of collecting 50% of that $138 is 82%. Holding this position will give you $2.69 dollars in theta decay every day to start. With that credit, our break evens on this positions are $1.38 higher and lower from our strikes, which means we can walk away with cash as long as the price of IQ stays between $13.62 and $16.38 by May.
What I am hoping for is for IQ to bounce off this low, and maybe start to go sideways or trend back upwards towards 20. IQ can move, so my naked call is a bit further out of the money, but I like the current break even prices. I won't keep this on till May 21st. I'll wait for the stock to leak higher, and with that the volatility will come out of these option prices, then you throw on the Theta collected after a week or so then I should be able to buy back this strangle for $69, walking away with $69 in profits per 1 lot.
If IQ fails to find more buyers and starts to fall and test my $15 PUT then I'll drop the CALL down from $25 to $20 to collect some more premium. If I had to guess, most of the profits is going to come from a crush in volatility. I would have been better off putting this position on earlier in the week, but the current IV Rank of 31 will come back to the mean around 19 if this stock drifts a little higher. Let's see how this plays out.
IQ, WILL HISTORY REPEAT IT SELF?Hello fellow traders and investors, here's another trade idea.
IQ has recently pulled back to the common support area, if IQ makes a recovery to the take profit area it offers a 45 to 65% ROI.
Technicals:
The Macd indicates that it's oversold
The EMA's are in a downtrend
The RSI is oversold
When To Buy:
When the EMA's and the Macd crossover
When To Sell:
I recommend selling at the take profit area.
Fundamentals: IQ is an Asian online streaming service provider. Their P/S is 2.89 which is quite good, a debt/equity of 2.22 which is very bad, a sales growth Q/Q of -0.50%, an earnings per share growth of 39% Q/Q, a profit margin of -23.70% and I do have to warn that this stock is quite volatile.
Rating: 50/100 the technicals look really good but the fundamentals aren't very good with a lot of debt, a profit margin of -23.70% and sales growth of -0.50% Q/Q their fundamentals aren't great.
NOTE: There's a resistance around the 200$ area.
I hope you enjoyed this quick analysis and many more to come.
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Thanks.
