Last week we took a look at a longshot. PODD, a biomed inulin pump manufacturer had jumped up and our longshot was that it could fall back to where it was. We had two key elements to the trade. (you can read it here)
First, we were looking for an entry signal from a move below the 10 day moving average. Take a look at what we have seen since we last wrote about it:
It hasn’t given us the trigger just yet but it sure is trying. It is pushing hard against that 10 day moving average. The more it pushes against it the more likely the move down will be more dramatic. We can also see that this consolidation has created a bearish MACD crossover. That is another sign telling us PODD wants to drop.
The second factor is using the leverage of options to boost the potential of this trade. If we look at the 280 target we mentioned in the previous article we can see the May put options are currently at about $5.80. If we get the trigger we are looking for we can see if we can grab the option close to that price and jump in the trade.
It just goes to show that trading is a bit like hunting and you really have to stalk great trades with patience. We’ll continue to keep an eye on this.
Keep learning and trade wisely,
John Boyer
Editor
Market Wealth Daily
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