We all remember Verizon’s advertising slogan, “Can you hear me now? Good.”
It helped ingrain into Americans the reliability of Verizon’s cell phone service and the copious number of locations one could actually use their cell phone. To this day, no phone has service at my old house in High Springs, FL. The nearest gas station was 15 minutes away and it was a Busy Bee at that. Regardless, Version’s prowess for usability was world renown.
POTENTIAL TOP PATTERN
Verizon Communications (VZ) has been forming what appears to be a double top chart pattern. The neckline has yet to be broken, and luckily, the price action sits neatly on the 100 simple moving average. Back in late August, this exact same formation occurred. At the time, I waited for a close below $43.21 and sold my Sep $43 put option 2 days later for 35% ROI when we hit the 100 simple moving average.
LEVELS TO WATCH
There is support and several lower wicks around $43.80, so I would wait for a solid close below that price before entering the trade. If the stock trades below $43.54 and the time is after 3:45 pm EST, this would shape up to be a quite probable trade in my opinion. I took the liberty of drawing some potential targets along the way, using a type of analysis called Fibonacci analysis.
HERE’S THE TARGET
If this trade triggers, I would place my stop above the 100 SMA and potentially the 10/23/12 candle, as well. My first (and likely final) target is approximately $42. However, on this trade, like the one back in August, I will be quite happy with a 35% ROI. If you did this trade with $1,000 (after subtracting commissions), you would still have around $300. That’s almost a car payment for a lot of people.
LET THE TRADE COME TO YOU
So, have a goal, be able to mitigate your risk, and let this trade come to you.
Let the market be your playground! In all seriousness, who is afraid of one of those big slides? This is the time when we might slide down the slide, have our feet firmly placed on the white sand and scamper along to our next adventure…hopefully the jungle gym.
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