Bottoming Pattern

Yesterday Lottery Ticket was a dismal failure as FIT made a full reversal and then gaped down.  How rude.  Today I’m looking at a nice bottoming pattern with an nice entry signal with upside potential.

PSEC has just recently broken a nasty downtrend and is holding support.  The nice candle today suggest buyers are trying to move it higher.  As an added bonus the chart is showing a possible Inverted Head and shoulders pattern and a Rounded Bottom Breakout.  If your interested take a look at the 19 JAN 6 Calls.  A close below the last swing low would be a good reason to exit the trade.

Recently Closed Trades

CSCO 17% • BAC 31% • CREE 48% • WMT 245% • NFLX -40% • STX 42% • 2^nd CSCO Trade 30%

Today’s Market Prep Note

Yesterday we saw some selling on worries the Tax Reform bill would not get finished up.  This morning sentiment quickly changes as news of a vote and passage could happen as early as today.  I hate politically driven markets because as retail traders our edge simply disappears into the spinning black hole of the news cycle.  Futures are not pointing to a significant gap up that will put a lot of pressure on those that got short early.  Let’s keep in mind that a Dow 25,000 print is not that far away so don’t expect the bulls to give up easily.  Perhaps the passage of tax reform is all the fodder needed to encourage the bulls to push higher.  I think the road ahead could be a bit bumpier than we have seen this week.  Plan carefully and remember to take profits.

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Doug Campbell is not a licensed financial adviser, nor does he offer trade recommendations or advice to anyone except for the trading desk of Right Way Options Inc.