"See how I spot potential 100% winners before they happen" Nate Bear, Lead Technical Tactician, Monument Traders Alliance Hey Gang, This has been one heck of a trading week. No joke, I went 5/5 to start Thursday with another 100% winner on CAVA. For those of you who missed my Open House, it was a trading bonanza. Fortunately, I think there are a few stocks capable of delivering some mammoth trades over the next week, even with the Fed rate announcement. So, let's talk about three stocks that I'm watching like my life depends on it. CAVA Group (CAVA) Yes, I'm bringing up Cava…again. I don't care. I want you to get bored with making money. And Cava has been a trader's ATM. So, what makes Cava different from all the other stocks out there? First, it's a smaller company whose stock isn't part of major ETFs. So, if the indexes start to move one way or the other, Cava doesn't necessarily have to go with it. It's like that friend who goes off to do their own thing at Disney all day. The second and most important reason I love this stock is the strong bullish momentum. Every time you think this stock is done making new highs it takes another leg up, while the pullbacks are shallow. Below, you can see how this creates a classic TPS setup that traps in the shorts for a squeeze: This 195-minute chart has a strong upward TREND and a clear consolidation PATTERN. The only thing missing is the squeeze where the Bollinger Bands move inside the Keltner Channel. On smaller timeframe charts like the hourly, the TPS setup has already completed, with the squeeze 'firing' (that's where the Bollinger Bands do the opposite and go from inside the Keltner Channel to outside). So, why am I showing you the 195-minute timeframe? Because if we get a small pullback over the next week before breaking to new highs, that will deliver the squeeze on the 195-minute chart. Now, let's take a look at another stock that I've got my eye on. Lumen Technologies (LUMN) This one is a higher risk play, but still worth watching. Plus, it's extremely cheap, making it perfect for small accounts. Lumen's stock caught a bid in late July, sending shares from $2 to over $7. Since then, the stock has come off its highs, but has held most of its gains, trading between $5.00-$6.25. One of my trade ideas from yesterday was to use this pattern and the gap fill left open from 8/28 as a bullish setup. While that brought up a day trade setup, the bigger picture is in the TPS chart setup below. This is a perfect illustration of the TPS setup. We have a clear uptrend, a nice consolidation pattern, and now a squeeze on the daily chart (shown by the red dots in the corner). I bet there are a lot of short sellers betting the stock would collapse and are now stuck. That's why any decent push higher should spark a squeeze that punches shares through the recent highs. We've gone over two of my favorite stocks. But I've got one more for you. Forward Air (FWRD) Last up is a sneaky little stock that I haven't heard anyone talk about. Yet, it's arguably one of my favorite charts right now. Let's start with the juiciest part: a +26% short interest. That means that one out of every shares that's available to trade for this company is being sold short. While the others on this list have a decent short interest, getting north of 20% is where things start to get serious. Now, some stocks have high short interest for a reason. For example, B. Riley Financial has a ton of problems with investigations digging into the company. Naturally, it's attracted a lot of bears who are willing to be the stock will drop further. FRWD is different. It's the kind of mismatch that makes me salivate. The stock has an incredibly high short interest. Yet, shares are higher than they've been since March of this year. Ideally, the stock would be near its 52-week highs. Making new all-time-highs would be even sweeter. However, this stock still has plenty of bullish momentum that keeps pushing the stock higher. Looking at the chart below, we see another TPS setup on the 78-minute chart. Now, this squeeze is in the process of firing and will likely trigger a short squeeze for anyone who had their stop-loss orders at the recent highs. Don't worry. These types of stocks will often keep making these same patterns multiple times before they finally give up. So, make sure to keep it on your watchlist. |
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