YOUR ACTION PLAN The trade for today is H World Group ADR (Nasdaq: HTHT). It has everything I need to see in a long setup - trend, pattern and squeeze. I want to buy the February monthly $40 calls (expiring on February 17) on a pullback to the 21-day exponential moving average, or EMA, which is currently around $42. The EMA is a similar statistic to simple moving average, or SMA, but EMA applies more weight to recent data. Another thing I like about this setup is that it has the potential for a short squeeze. With the short float over 20%, if we do get some money coming into the markets early this year, we could get an outsize move to the upside in this name as shorts are forced to cover. My stop would be a daily close under $40, and I'll be targeting a move higher to over $45. | (Click the image above to enlarge) |
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