"These two trades – CAVA and SMMT – showcase different strategies." Nate Bear, Lead Technical Tactician, Monument Traders Alliance Hey Gang, These markets can be extremely difficult to trade if you don't understand them. Every day could bring dozens of opportunities…or just as many pitfalls. But with the right strategy and know-how, you can spot lucrative setups and capitalize on them quickly. Today, I want to walk you through two trades I took on Tuesday that demonstrate exactly how I navigate these tricky waters. One was a momentum play on a high-flying stock, while the other capitalized on a potential short squeeze. Both resulted in rapid profits. But more importantly, I want to show you how you can learn to spot these opportunities yourself – in real-time, as they unfold. CAVA (CAVA) Cava (CAVA) has been a go-to ticker for me this year. I like this stock because it has a lot of bullish momentum. With the stock up over 180% year-to-date, it keeps putting in new highs, pulling back slightly, and then punch to new highs. That's the kind of price action I like to follow. Tuesday, I did this using the 78-minute timeframe. This setup involved a combination of my TPS framework AND some common sense. CAVA announced earnings that sent shares to nearly $130 after they had already steadily climbed over $100. Then, we got a short-term pullback that wasn't too severe. I watched this price action develop into my TPS framework: - Strong upward TREND
- Consolidation PATTERN
- SQUEEZE where the Bollinger Bands move inside the Keltner Channel.
Since I was using the 78-minute chart, I went with the options expiring about one and a half weeks into the future. Sure enough, the stock started to move towards the gap fill, and I locked in some quick profits: But that wasn't the only trade I took on CAVA. Around lunchtime, during the LIVE OPEN HOUSE, I found a fresh setup on the 5-minute chart. Everything here was the same except for the timeframe. Since I was working off of a 5-minute chart, I planned on this being a daytrade. So, I bought calls that expired this Friday. Sure enough, the stock started to slide higher, giving me two excellent exits. However, this was just one of the opportunities I found on Tuesday. Let's take another look at the trade setup from the LIVE OPEN HOUSE. Summit Therapeutics (SMMT) This setup was quite different from the one I just showed you in CAVA. Summit is a stock with a high short float - over 20%. High short float stocks tend to have short squeezes that cause price to climb rapidly. Essentially, bearish trades take short positions on a stock like Summit, betting it will go lower. At some point, when too many are piled in, the stock's price jumps, in this case because of positive news. Now, all those short traders are underwater, with many forced to close out their positions to stanch the bleeding. Short traders exit their positions by buying back the stock, which sends price higher. That forces more traders to close out their positions, creating a cascade of buying. And that's what I was looking for in Summit. The stock had jumped early on cancer news that sent the stock soaring. After a modest pullback, the stock began to form a squeeze on the 1-minute chart (indicated by the red/black dots at the bottom). I used this to time my entry and when with the nearest expiration calls I could find, which happened to be in October. However, because I expected the stock could rise quickly from the short squeeze, I felt that this was a trade capable of turning a nice profit. And sure enough, a couple of hours after I bought the call options, I was walking away with a nice DOUBLE on the trade. | 
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