Two Charts That Are Setting Up For Significant Downside

Two companies reporting earnings this week have very bearish chart formations that imply a significant move to the downside for each after their reports.

On one of these stocks: I've already purchased a few puts and, like the $GRMN upside 400%+ trade last week, I like this one for 400%+ to the downside via these OTM  options.

$DLTR looks like it's setting up for a move to the low $40's.  I sent out the private alert this morning via twitter and in the chat room for the $50 puts I entered at $.50 that expire in March.

I am trading against the option activity with over 14k in call volume vs 2k in put volume, an almost 7:1 ratio.

The chart has a nice topping pattern and is sporting another bear flag in the shorter term time frame.



$ANF is also poised for continued downside. I think the stock trades into the $20s the next few months. The only issue is, the options are pricing in a possible sharp move, meaning you will have to risk more capital to get in on the trade. I have not entered $ANF puts yet, and I may not. Currently, I am in the $DLTR $50 puts. Both are high risk earnings trades, but I feel confident that they will resolve much lower post earnings.


Known 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.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)

One thought on “Two Charts That Are Setting Up For Significant Downside”

Leave a Reply