Hey! Guess what? Traders do not have a crystal ball nor a time machine. They don’t know what the market is going to do. We merely find favorable technical/fundamental reasons to form a bias and then find favorable trade signal set ups to take advantage of the opportunity. Take for example what we did a few months back in Kuerig Green Mountain (GMCR). The stock had been getting hammered after earnings on August 6th:
We thought that the move was way overdone and the company could attract buyers as it did as a higher price. It fact, we were right on. Problem was we didn’t buy enough time and the huge move happened after the options we purchased.
We see a similar set up emerging in Twitter (TWTR). The stock has gotten knocked down to lows not seen since September:
We signaled the following entry signal:
12-21-15: Based on our methodology a signal has been generated:
Buy (opening) the TWTR June 27 strike call
Sell (opening) the TWTR June 32 strike call
For a debit of $1.00 or less.
This signal is not GTC, TWTR trading $21.50 or higher.
If you were to fill this signal, you would enjoy a reward to risk ratio of 4:1 holding your rights to exercise until the third week in June 2106!
