PLTR Double Top or Breaking Out?
Plus, an update on TSLA, eyes on SPY at 570, and trading MRVL options.
There is a lot of noise right now which only serves to remind me of how powerful reading chart patterns can be and how much I enjoy it.
Tariffs, Berkshire, earnings reports, jobs reports, and rate cuts round out most of the discussion and trying to sort it all out could keep you up all night.
I prefer to stick to what is consistent. Support, resistance, trends, and momentum.
While support is not something being tested right now, resistance is front and center. SPY and PLTR give us very clear levels to pay attention to.
Starting with the broader market, SPY needs to break through 570 (I have been repeating this as often as possible).
The rally has been solid, but it will mean nothing if we get a hard rejection at this resistance level.
The 200-day simple moving average (SMA) is near 572 and the actual resistance level is 569.30. The zone between the two is where sellers will try to send it lower.
The 50-day SMA has crossed below the 200-day SMA, creating the feared “death cross” which signals a near term downtrend. Some doubt the legitimacy of this signal, we are about to find out.
The relative strength index (RSI) at the bottom of the chart for SPY has moved back above 50 and if it holds, we could see sideways action instead of a rejection. This would be a bullish set up and something I am watching for.
TSLA
Looking back at the TSLA trade from a couple of weeks ago, the bulls have achieved their initial goal of breaking above resistance and the trading range. Currently squarely in range for a long trade entry.
The candles are now trying to hold 277 and could quickly launch from this level if we get a positive week ahead. SPY breaking out at the same time could create serious momentum.
The ATE Trade Ideas spreadsheet is updated for paid subscribers with the options contracts I am considering for TSLA as well as profit taking levels.
PLTR
Earnings will be reported after the close on Monday which means this is a high risk, high reward trade. Don’t worry, if you don’t like to trade earnings we also have a MRVL trade lined up.
First, let’s take a look at the chart and key level for PLTR which comes in at 125.00.
The trick here is to select the right option contract for the trade you’re interested in. The implied volatility will be ratcheted up, making options more expensive for PLTR.
If you wait until Tuesday, the IV will have come down quite a bit and you will be paying less for these options in theory.
The problem with that is if you are not in the trade and PLTR has a hugely positive report, you may miss out entirely.
That said, we have a plan for both a breakout and a rejection. Just like we always do.
The strength of this stock has been notable and even if it does sell off post earnings, we could see a cup and handle pattern form shortly after.
That would present another great set up and one that might be a little less risky. Just another way to approach trading PLTR for some upside.
In addition to the TSLA update and PLTR trade ideas, MRVL is setting up nicely with defined risk levels and decently priced options. And you know it is a favorite of mine.
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