One Trade I Made Today

With the market just off all-time highs and seemingly rising every day, there will be a pull back again. I know bears, and it's been rough watching this action but you've had some pullbacks this year you could profit on. The most recent pullbacks, in fact, have seen some of the high flyers get kicked to the curb. I also bought PUT options in a high flyer that I think could see a modest pull back as the market consolidates the next week or two.

The chart below goes against what I usually trade. Essentially, I don't trade against the trend. The trend for this stock is clearly up. However, my thought process is such:

Stocks are going to consolidate and/or pull back short term
The stocks that have rallied the most will likely fall the most

$PSMT has been on a tear. They reported earnings and rallied significantly. I'm looking for a move back to $110-112 where I will lock 100-300% profits on my November $115 puts. I will cut my losses at $120 break.

I own 3 contracts at $1.20 and will sell for a loss on $120 break, or hold for 100% gain on the pull back I see coming.

psmt1

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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