Today’s trade has me thinking of this classic corny joke from Pulp Fiction:

One of the strongest sectors out there right now is banking. Particularly regional banks. And as we head into year-end, the catch-up trade is real and money managers chasing alpha are looking into some beaten-up names in the regional banks to get the juice they need to make their year.

This plays in favor of today’s trade which has a yawning gap to fill which is likely to overshoot on the upside if a broader market melt-up is in the cards (narrator: we think it is).

Check out this chart of KeyCorp $KEY: [Read more…]

During our Analyst meeting this morning, the idea I brought to the table was a long bet in Cloudflare $NET.

I like that it’s just starting to break above a level of resistance that has been in place for the better part of two years.

My initial thought was to make a short-term tactical bet on a run to $100, but then I noticed that in the June options expiration series, the highest strike available is $110. Clearly the CBOE doesn’t read All Star Charts research and our belief that this stock could touch $130 per share over the next 3-6 months!

Check out this chart of $NET and you’ll see a move to $130 doesn’t seem that outlandish at all:

[Read more…]

If a new leg of the bull market is just getting started, positioning in the leaders should pay off well. With this in mind, we’re going to get involved in a name everyone knows and uses — Amazon. The odds are good that Amazon will deliver profits to those well-positioned for a run.

Implied volatility in the options affords us the luxury to go further out in time for our thesis to play out, but we’re going to cap our upside both because we think there will be some upside resistance that comes into play and also to increase our odds of success.
[Read more…]