Bullish Breakout

Last week BAC produced and very nice bullish breakout showing significant strength.  BAC has now pulled back leaving a hammer pattern at price support.  Should price follow-though showing buyers stepping in at support BAC would be a buying opportunity.

Banks typically do well in a rising interest rate environment.   Next week is the FOMC meeting and the market believe there is more than a 90% chance they will raise the rate.  The overall market is trending up is currently looking a bit stretched so consider that if you decide to act on this trade idea.

Consider the BAC JAN 28 Calls.  Consider scaling out with first target area between $29 an $30.  Plan your trade carefully as there will not be follow up management instructions on this free trade idea.

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

With the futures pointing to a 200 point gap up in the Dow on the back of the Tax Reform bill passage, it would seem the market is bulletproof.  Even the threat of nuclear war seem to be nothing more than an annoying mosquito easily shooed away.  Now the Dow has 25,000 in its cross-hairs and seems to have all the money and energy necessary to drive for that goal.  However, I doubt the ascension to this plateau will be a smooth one.  Friday’s full reversal intra-day whipsaw may be a clue to fast and whippy price action ahead.  Big price action swings could be possible as we move forward making it very challenging for swing traders.  The bulls are obviously in control, but Friday’s price actions should serve as a reminder that the bears are still here and they have been waiting to eat for a long time.  Plan your risk carefully.

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Investing and Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is financial or trading advice. All information is intended for Educational Purposes Only.  Terms of Service.

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.