The week is finally over.
Between the Federal Reserve meeting, inflation fears and low volume, it wasn’t the best week of trading I’ve seen. Far from it, in fact…
Toss in more volatility from the quad witching week — when futures, index options, stock options and single-stock futures all expire at the same time— and it’s enough to make you want to throw up your hands, pack up your gear, go fishing and just come back next week.
But we can only trade the market that’s in front of us, and earlier this week I decided if all I was going to get was lemons, then I’d make some damn lemonade.
And that’s exactly what we did with Plug Power and this week’s fuel cell sell-off.
Whenever there’s weak volume, the high-volume trades stand out that much more.
And at the outset of the week, my Blitz Tracker picked up on aggressive put buyers in Plug Power Inc. (Nasdaq: PLUG). Puts are of course bearish plays…
Shares were down 3.5% on the day as the big boys bought 2,518 of the June 25 $30-strike price puts and sold monthly June $26 calls.
PLUG was breaking below its eight-day moving average amid broader market weakness, so I sent out an alert to Weekly Biltz Alerts members to take a small position in the June 25 $30 puts.
Now I know a lot of people are long PLUG and, to be honest, that’s why I liked the downside play here.
Because if everyone’s long the stock and fuel cells sell off, it can create that snowball effect of selling where the stock can liquidate.
And that’s exactly what we saw in fuel cell companies on Monday, trading down around 8% on the day.
Well, it looks like the big boy traders were onto something because come Tuesday morning, General Motors Co. (NYSE: GM) announced a deal with Westinghouse Air Brake Technologies Corp. (NYSE: WAB) to develop and commercialize electric batteries and hydrogen fuel cell systems for WAB-built trains.
PLUG shares dropped 5.25% that day, along with other fuel cell sell-offs, and Blitz members took profits for a 50% gain on half of the position ahead of Wednesday’s Federal Reserve meeting.
And with the sweet gains we made on this lemon, I’m gonna go find someone with some vodka and have a party!
Check out the short video below where I break down the setup of this trade and how we used it to manage risk in a choppy market.
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Traders need a new way to level the playing field against Wall Street and its lightning-fast trading activity — without putting their entire portfolio at risk.
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Blitz is where I show everyday investors how to capture predictable profits with trades that could pay out overnight.