Why Netflix Was a Better Stock Than Nvidia Last Week [Trade of the Day Wake-Up Watchlist] Editorial Note: Due to high demand for more trading ideas, our tacticians are going to be ramping things up. Over the coming months, we will be sending you bonus trade ideas, insights and demos - for FREE. And it all starts today! Below, Nate Bear covers why he gets excited for volatile markets like this and how he spotted an A+ trade setup using his [new proprietary AI trading tool]( (who we call S.A.M. for short). If you are looking for quality plays in a market like this, you need to read his breakdown below. -Ryan Fitzwater, Publisher, Monument Traders Alliance --------------------------------------------------------------- Why Netflix was a Better Trade Setup Than Nvidia Last Week By Nate Bear, Lead Technical Tactician Hey gang, These are the types of markets that I absolutely LOVE! I wake up most days and find half a dozen fantastic setups. However, I know it can be overwhelming, especially for newer traders. You donât know which ones to take and feel like you miss the best ones. Donât worry⦠Papa Bear is here to help. See, Iâm just like everyone else. Sometimes, my emotions get the better of me. So, when things get hectic, I like to slow them down and focus on my highest-quality setups. Gotta stay cool, baby! Honestly, thereâs no better way to do that than to remove yourself completely from the equation. Thatâs when I lean on my [AI-Powered Scanner](. We call him S.A.M. for short. The full name is Stock Acceleration Monitor. S.A.M. is an absolute lifesaver when opportunities pop up quickly, and you have little time to spare. In fact, I want to walk you through how I used it on Friday. Because while everyone was busy watching NVDA and SMCI, S.A.M. caught a fantastic Netflix (NFLX) setup. The Setup Basics Anyone whoâs been with me for a while knows that my favorite setup follows three letters: - (T)rend - Stocks making an obvious move higher.
- (P)attern - Price enters a consolidation range that tightens
- (S)queeze - The Bollinger Bands move inside of the Keltner Channel Hereâs what that looked like on the 195-minute chart for Netflix. (Source: ThinkorSwim) If you start at the bottom left and work your way right, youâll see price marching higher clearly and steadily. It doesnât always have to be so linear - think Meta after its latest earnings. Iâm looking for a stock that hasnât shown signs of aggressive or moderate selling. This is the trend part of the equation. The Pattern comes into play in conjunction with the Squeeze. The two solid white lines contain the majority of the price action in that tight consolidation area. This doesnât have to be exact. Just make sure the boundary lines you draw capture 80%-90% of the price action AND the price range is contracting. Lastly, we get the Squeeze, which is seen at the bottom with the red dots. This signals when the Bollinger Bands move inside the Keltner Channel, creating the timing conditions for a breakout. Since I trade options, the timing piece is crucial. I donât want to enter trades too early and have the price of my option contracts eaten up by time decay. That is all there is to the TPS setup. From TPS to A+ So, what makes something an A+? A+ setups happen when the 8, 21, and 55-period Exponential Moving Averages (EMAs) stack on top of one another. For bearish setups, it's stacked in the reverse order. Hereâs what that looked like with Netflix. The 55-period (green) exponential moving average sits below the 21 (magenta) and the 8 (light blue). Each is right on top of the other. Generally, youâll see this when a stock is floating higher. It also happens a lot on smaller time frames as shown below with Meta on the 15-minute chart squeeze that happened a few days after its earnings pop. (Source: ThinkorSwim) The EMA stack gives an extra kick to an already great setup. From A+ to Top Trade If we know what makes a TPS setupâ¦and of those which are A+... how do we pick the best of the bunch? The answer is actually quite simple. You look for the one with the most A+ setups across multiple timeframes that meets our criteria that have enough liquidity. When Netflix was picked up by [S.A.M]( there were A+ setups across multiple timeframes. And Netflix certainly has enough liquidity (volume) on its options to make it tradeable. However, not every stock with multiple A+ stacks are great setups. Take a look at this list below: I cut this down to a handful of stocks with A+ setups. [We Could Be Less Than 3 Months Away From an AI Super-Event]( According to one of the world's top AI scientists, there's a major event coming in as little as three months that could cause expensive tech stocks like Microsoft, Google and Nvidia to double or triple in price in the following months. But whatever you do, don't go all-in on Big Tech before you have all the details. [Click here.]( The first stock looks very solid from its daily chart. Everything is in a nice uptrend with all the EMAs stacked. The only problem is the options could be better. You can only trade monthly expirations, and the volume on those is a few contracts for at-the-money strikes each day, at best. Thatâs the same for the other two stocks on the list. But I also want you to take a look at First Energy (FE). Despite the scanner saying the stock meets the criteria, I would say FE isnât in a clear uptrend. To me, this is a clear, drawn-out, sideways consolidation and not the type of setup Iâm looking for. Crafting the Trade Once Iâve got the stock and the setup nailed down, itâs all about execution. As an options trader, I like to buy calls and puts a bit in the money, typically around the +/- 70 delta. For the expiration, Iâll typically choose one thatâs 2x-3x longer than I expect the trade to take based on the timeframe. With the Netflix trade, I was looking at the expirations for the following Friday since I was looking at the 30 to 60-minute timeframes for my initial focus. Some traders may have wanted to play the 195-minute squeeze, which would take them out about 2-3 weeks for the expiration. Itâs all about how you want to play it based on your style and comfort level. You want a position size thatâs comfortable enough for you to hold that you're worried about whether to cut the trade before itâs had a chance to work. Action Plan This might seem like a lot to take in. But with practice and patience, itâll become second-nature. Thereâs no better way to do this than in our [Daily Profits Live]( room - where I also demo the power of my AI Scanner, S.A.M., every day of the week. This month in [Daily Profits Live]( Iâve hit 28 winners for a 76% win-rate and 49% average gain - all in less than a 3 day holding period. Whether youâre there for the trades as they happen, or reviewing them in the videos, this is the place to cut your learning curve and take your trading to the next level. [Learn more here!]( [It's Called "the Singularity"]( A new indicator shows "the Singularity" could launch as soon as three months from now. This is the moment we've all feared, when artificial intelligence officially surpasses human intelligence. And when the Singularity hits, the entire world will be thrown into chaos. [Click here to learn how to prepare yourself for what's to come.]( [Monument Traders Alliance] Monument Traders Alliance You are receiving this email because you subscribed to Trade of the Day Wake-Up Watchlist.
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