While many traders believe that the stock market is over extended and are looking to set up shorts, I choose to continue to look at the strength of some individual stocks for long trades.
TOP PICK
MasterCard (MA) still provides opportunities, at least in the weekly option, to anticipate continued upward momentum. Looking at the overall strength of this stock, you can see that it is making new all-time highs. Technically speaking, I find that stocks that make all time highs have strong upward momentum. I’m taking this trade based on technicals because momentum is moving this stock higher.
SELL A PUT SPREAD
This week my strategy in MA is to sell a put spread in the weekly option when the stock moves back to the 20-period moving average on the daily chart.
Other traders might also consider placing more of a directional trade using the same analysis. The put spread trade in the weekly option has proven itself successful for me over the last while as MA continues to rise.
Chart Caption:
This is my daily chart for MA. The white line is the 20-period moving average.
Once the price is close to that average I will look to enter the trade.
The white arrows are examples of entry points for this trade.
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