Great risk/reward for Long's going into Earnings Season

As the market corrects back to the 200 D SMA and consolidates between the $258 support level and $266 minor resistance, it has caused some panic. We want to remind traders that corrections and pullbacks are healthy for trending markets. Late 2017 rally was extremely strong the markets were clearly overbought, this pullback triggered by trade wars and inflation fears provide a better entry for a continuation higher. The risk/reward skews in favor for long positions with stops just below the 200D SMA. There is always the risk the things escalate and we find markets lower in the next few weeks, but as earnings season heats up, we expect a strong earnings season. Look for long positions in strong stocks and upwards revisions, and only shorts on weak stocks with downward revisions going into earnings. Happy trading!

Tony Zhang
Chief Strategist
Start trading with power using OptionsPlay
www.optionsplay.com

Trade active:

Nice move off support towards $270, with some minor resistance ahead.