| Hey traders, Lance Ippolito here! Welcome to our Weekly Rundown, where we'll share some of our top trading ideas — and our biggest winners!
Now, let's get to some…
Another high-profile short report crashed into the market this week, making for a boat-load of headlines and — more importantly — lucrative trading opportunities.
Investment research firm Hindenburg Research dropped its latest report profiling online sports-betting platform DraftKings Inc. (Nasdaq: DKNG).
The report alleges a company DraftKings acquired as a part of its SPAC deal has some questionable business practices overseas, which DraftKings denied following the report's release.
The short report saw DKNG gap down 10% from Monday's $50.59 close, sparking a market frenzy. Volume spiked over 400% from its normal levels on the day...
But believe it or not, this short report is the most bullish event that's happened to this stock in months. Investors have already stepped in to defend the stock, pushing shares back above the $48 mark as of Wednesday morning.
But there was one massive trade that stood out to me, from what looks like an absolute whale.
While it was a good trade for them, it could be even better for us. And that has me more optimistic than ever about where this stock is headed...
Here's Where I See It Going
This whale came in and sold 17,513 puts on a $42-strike call for about 44 cents. When you sell puts, you take in that credit. And if shares fall below that strike price, 42 in this case, you get long stock at $42 and the contract will expire.
Now, those puts were already down to about 25 cents on Wednesday… So he or she was up big money already.
A word of caution, however: Never sell naked puts unless you know your risk, and have a big boy account.
So where does it go next?
Well, the bulls stepped in and defended DKNG as it found support in the mid-$40 range. Finding support here is a strong bullish sign for DKNG. Which is good news for me, especially since I dropped $40,000 on sports betting stocks a few short weeks ago.
I expect DraftKings to trade sideways up until its next catalyst...
But remember, almost 80% of gaps get filled. So where is the next gap?
Probably right around the eight-day moving average... $52 dollars a share.
BIG Wins
The bullish bounce on our Chinese ADR plays continued this week with IQIYI Inc. – ADR (Nasdaq: IQ). Weekly Blitz Alerts closed the first half of the July 23 $14 strike calls this past week for a nice 48% gain from our entry. But we weren't finished cashing in on this trade...
On Monday, the stock saw another spectacular rally, jumping over 8% on the day and propelling our July calls to the $2.20 mark for another 78% win in just over a week!
+76% on the second half of IQ (July 23 $14 CALL) Entered on June 4 at $1.25 a contract. Exited on June 14 at $2.20 a contract
My Blitz Tracker also picked up on aggressive put buyers in Plug Power Inc. (Nasdaq: PLUG) on Monday. Shares were down 3.5% on the day and the big boys bought 2,518 of the June 25 $30 puts while selling monthly June $26 calls.
With shares breaking below their eight-day moving average amid broader market weakness, we took a small position in the June 25 $30 puts on PLUG.
Shares dropped 5.25% the next day, and we took profits for a 50% gain on half of the position ahead of Wednesday's Federal Reserve meeting. Fed meetings are always a big market mover, so we held on to the second half or our contracts to help manage risk by giving the trade exposure to the downside in the event of a sell-off.
+50% on the first half of PLUG (June 25 $30 PUT) Entered on June 14 at $1.40 a contract. Exited on June 15 at $2.10 a contract
If you have a big score you'd like to share with your fellow Future of Wealth readers, email us your screenshots of the trade and/or any details you want to share at wptestimonial@gmail.com, and we'll celebrate them here!
Don't Gamble That Nest Egg… Work to DOUBLE IT!
Recent volatility has some investors acting like gamblers with their retirement funds. Chasing lost money and meme stocks… panic selling and buying... It's sad.
Casinos can be fun, but leave the gambling mentality at the door when trading.
If traders can simply keep their heads… and work a solid plan, history shows that these markets are exactly where they can make great money.
Signing Off
If you're looking for more compelling trade ideas and stock market musings to read and help you prepare for what lies ahead, here's what other experts at WealthPress are saying:
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