The market is closed today for Juneteenth.
And I’m excited for the long weekend. But probably not for the reason you think…
Long weekends inspire extra volatility when Monday rolls around.
I’m watching one stock in particular…
This stock follows my favorite pattern.
Without this price action, traders are just buying at random points and expecting to walk away with gains.
That’s a gambler’s mindset.
We’re not here to gamble. We’re here to make money.
My Favorite Pattern
At its most simple, I love buying when everyone’s selling and selling when everyone’s buying.
But it’s a little more nuanced than that.
I want to see stocks that trade far from their moving averages, specifically the 50, 100, and 200 day moving averages.
Then I want to see the price stumble, or consolidate, which shows a possible reversal is coming.
The closer I buy contracts to the bottom or top of the extension, the smaller my risk level is.
I have a perfect example…
Fox Corporation (NASDAQ: FOXA)
On June 15, Fox Corporation announced its plans to acquire Roku Inc. (NASDAQ: ROKU) at $160 per share, valuing the company at $22 billion.
ROKU spiked after the announcement. But FOXA tanked:
This is exactly what I’m talking about. It’s a noticeable selloff that deviates from the normal price action.
Here’s the trade I alerted:
You can see on the chart above, its distance from the moving averages. You can also see that it rebounded nicely from the selloff in January. That adds more conviction to my trade.
This is the only position I have over the long weekend.
But when the market opens on Monday, I’m ready for the volatility to break loose.
There’s no telling what will happen in the news by Monday morning. For example, the U.S. and Iran seem to have agreed on a peace deal…
- More bullish news during a recent peace deal would send the market even higher.
- Any renewed conflict could stuff the market’s euphoria.
Follow along on my FOXA trade and pay attention to the news this weekend.
When the market opens at 9:30 A.M. ET, traders will be itching to buy the hottest stocks.
Take advantage of this long weekend and the coming volatility on Monday. We only get a few opportunities like this every year.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
