EXEL's chart is interesting right now. It has been in a falling wedge since June.
It seemed to flip in July, but broke down again on Monday when it dropped as low as 33.8-ish
But it broke the resistance line fairly easily yesterday and it seems to be bullish once again.
The falling wedge seems like it could break on a decent earnings report - or even before then.
Ideally, I'd like to see it re-test the support that's at about 37. If it holds that level, or breaks the wedge, I'll start looking at options for a trade.
The other reason I like the potential of this trade is the volume gap that sits from about 41 to 44.
The downside to this trade? I'm not sure EXEL's value supports a jump. My 1 year targe on EXEL is about 44. So it's not exactly undervalued.
That said, I like the risk reward of this trade. Call options at the current price (38 strike) for the first available date after the earnings are about $2.25. I'm more likely to buy a call here than buy the stock outright to manage the earnings risk.
We'll see how this plays out over the next week and I'll update.
It seemed to flip in July, but broke down again on Monday when it dropped as low as 33.8-ish
But it broke the resistance line fairly easily yesterday and it seems to be bullish once again.
The falling wedge seems like it could break on a decent earnings report - or even before then.
Ideally, I'd like to see it re-test the support that's at about 37. If it holds that level, or breaks the wedge, I'll start looking at options for a trade.
The other reason I like the potential of this trade is the volume gap that sits from about 41 to 44.
The downside to this trade? I'm not sure EXEL's value supports a jump. My 1 year targe on EXEL is about 44. So it's not exactly undervalued.
That said, I like the risk reward of this trade. Call options at the current price (38 strike) for the first available date after the earnings are about $2.25. I'm more likely to buy a call here than buy the stock outright to manage the earnings risk.
We'll see how this plays out over the next week and I'll update.
Note
We're now above the 20/50/100/200 moving averages. I'm currently looking at my options if we breakout.I'm not loving the volume here, and earnings on the 4th of November is an x-factor. There's a chance I might sell puts rather than just going in on a direct buy.
Note
We've broken the wedge. I'm going to see if it holds above the trendline today, then make a play if it does.Note
I haven't opened a trade for 3 reasons:1. I don't like how little volume decline.
2. Earnings on the 4th is a wildcard that can break structure.
3. My EXEL price target is only 44.
I am not going to take a trade here. Instead, I'm going to hope for a drop during earnings - ideally one that maintains the structure of the trends and I'll initiate a trade there.
**Never take a trade just because it breaks a pattern. Look at all the variables available first.
Note
Looks like this was a false breakout.Moreover, with the earnings crashes of late I won't be opening a trade here before their earnings release. Time to take the wait and see approach.
Note
I really wish there wasn't earnings this week. Today's price action looks a lot like a support test on the old resistance. But with earnings coming up, I'm not going to gamble.Note
No joke, I forgot about this trade on Friday. It's behaving exactly how I thought it would. There is still a gap play and moment that could take this from $41 to $45 or higher, but personally I won't be taking this trade just due to the upside being too small.
Trade closed manually
This is one of those trades I didn't take and I regret. It played out exactly as I expected. If I had taken the trade instead of being a TACO, I would have closed the trade today with the gap fill.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.