Trading RIVN Calls and XBI for Upside
RIVN bounced off of the bottom and XBI is poised to break out of consolidation.
Markets look like they want to quickly digest the inflation data and move past it.
There is more information on the way Friday in the form of Producer Price Index (PPI) so we are not out of the woods yet.
That said, I like the potential for more upside.
Even better than that, I am starting to see more quality set ups.
Before getting into today’s trade ideas (I’m excited about both!), take a look at this chart for SPY.
The 9-day simple moving average (SMA) continues to be respected. Any break below finds a quick recovery and that is keeping me bullish.
The trendline could be tested before continuing higher. That would only be a roughly 2% drop from current levels.
I would like to see 494 hold, but as long as 488.77 is not broken I see no reason to change my bullish stance.
If SPY gets back above 500 in a meaningful way, we could see more money come pouring in.
I think waiting for Friday’s data to come out before taking a strong position is a wise move. The more information you have the better you understand your risk and that is always a good thing.
And if you are willing to take trades ahead of that data, that is also a solid approach.
You just need to manage your risk, which means spending more time paying attention to your trades during these data events and having your stops set.
RIVN is making higher highs and higher lows off of recent lows and I like the way things are setting up.
XBI is the SPDR S&P Biotech ETF and has been consolidating just below 92. If small caps are going to go, XBI might lead the way.
Let’s get to the trades!
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