How Even a Subtle Move Can Generate a Tidy 47.5% Gain

[Trading With Larry Benedict]( How Even a Subtle Move Can Generate a Tidy 47.5% Gain By Larry Benedict, editor, Trading With Larry Benedict When the Fed pivoted its stance on interest rates last November, the iShares 20 Plus Year Treasury Bond ETF (TLT) enjoyed a massive boost. When the market expects rates to fall, the value of existing bonds increases (and vice versa). That’s because investors will receive a higher yield from older bonds than new bonds issued with a lower yield. That’s what happened here. But that strong rally put TLT in overbought territory. And it retraced quickly. So we watched it closely in anticipation of a bounce. By capturing that move, we generated a 47.5% gain in just 13 days for members of my options advisory, The Opportunistic Trader. So let’s check that trade out now… Recommended Link [Uncover the Hidden Truth of the Electric Vehicle Industry]( [image]( “Most people are unaware of a major issue lurking within the electric vehicle industry – an issue that mainstream media conveniently overlooks. Even the CEO of Jeep has admitted that unless this critical flaw is addressed, the market will collapse. Regardless of whether you own an electric vehicle or not, this situation represents a pivotal moment for the U.S. auto industry. It also presents a unique investment opportunity, especially with the impending rollout of new emission laws under the Biden administration. I invite you to look “under the hood” of this pressing issue in the EV industry and discover how you can profit from it.” – Nomi Prins [Click here to find out more.]( -- A Subtle Setup In the chart of TLT below, you can see the diverging pattern between the Relative Strength Index (RSI) and the TLT stock price through October (orange lines). Growing buying momentum halted TLT’s fall. Then TLT rallied as the RSI ramped up through resistance (green line) and into the upper half of its range: iShares 20 Plus Year Treasury Bond ETF (TLT) [chart] Source: e-Signal Yet the RSI eventually reached overbought territory (upper grey dashed line). That put TLT’s rally under increasing pressure. As you can see, the RSI bounced along the overbought line (red circle). It made a couple of lower highs before falling back towards support. This steady decline in the RSI pulled TLT down rapidly. Yet TLT’s sharp pullback also hinted that there could be a trade for us. And we saw a subtle change of momentum setting up a potential reversal. Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. So on January 18, we entered a long position by buying a call option on TLT. As you can see, TLT didn’t bounce straight away. Instead, it gradually built short-term support as the RSI flattened out. Then the RSI burst back through resistance and into its upper band. That enabled TLT to rally. Take another look: iShares 20 Plus Year Treasury Bond ETF (TLT) [chart] Source: e-Signal With our position in good profit, we closed out our trade by selling our call option on January 31 for a very tidy 47.5% gain. To be clear, we generated this return by using options. Had we just bought the shares instead, our profit would have been less. Yet as this trade shows, even a subtle change in momentum can hand a nimble trader outsized profits. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Did you take part in this trade? Let me know your experience at feedback@opportunistictrader.com IN CASE YOU MISSED IT… [Elon Musk’s THREE Startups Created an “Army of Millionaires”]( ”Elon Musk’s last three startups were PayPal, SpaceX, and Tesla. Online payments, electric cars, and rockets into space. Just $300 into those startups could’ve turned into $647,000. That’s why the BBC said that Elon helped create “an army of millionaires.” Can Elon create another army of millionaires with his new AI startup? I think so. And remember, AI has already grown 42 times FASTER than the internet. [Here’s a 2-minute video that shows Elon’s AI in action.]( It’s exciting because I trusted my life to the AI as we hurtled at 65 miles per hour.” –Colin Tedards [Click here to see the insane footage.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. 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