100% Gain in 24 Hours
by Mike Paulenoff
April 8, 2016 • 1:00 AM EDT
On Monday April 4, Mike noted in the room that the US Oil Fund ETF (USO) should hold key support at 9.25-9.00 given that its larger pattern represents an incomplete medium term recovery rally arguing for another up-leg towards 12.
On Tuesday, he got into the USO Apr. 8th 9.00 Calls at 27 cents, looking to take advantage of a technical bounce in the USO in reaction to Wednesday's EIA Oil Inventory Report.
Sure enough, the USO bottomed right at 8.99 on Tuesday, reaching above 10 intraday on Friday. Although Thursday's EIA Report would subsequently show a neutral/bearish weekly build in oil supplies, Mike's interpretation of the promising technical set up earlier in the week anticipated strong price action into, and a positive reaction after, the release of the data.
Mike exited the calls on Wednesday at 55 cents, for a 100% gain in 24 hours.
The USO trade was one of several strong trades for Mike since the start of the month. He exited the Silver Wheaton (SLW) puts on April 1 for a +200% gain in 1 day, and the SPDR S&P Biotech ETF (XBI) on April 6 for a gain of 10% in 2 weeks, displaying trading accuracy across a number of markets: Oil, Metals and Biotech.
Plus, Mike exited his Visa (V) and Raytheon Company (RTN) trades this week for 2% nominal gains, with only Nike (NKE) incurring a nominal loss after a 3.8% gain from a prior long position from March 14-18.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
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More Top Calls From Mike
Last Wednesday afternoon (Jan 13), with the IWM at 210.76, Mike Paulenoff told MPTrader members:
"The Russell 2000 Small Cap ETF is just about 0.5% off of its all time high. As long as any weakness is contained above 204.30, my near-term pattern set up from the 1/04 pullback low at 190.94 is poised for still higher ATHs above 211.73."
The IWM reached a high of 215 the very next day.
Back on Dec 2, after salesforce.com (CRM) reported strong earnings but price languished, Mike Paulenoff told MPTrader members:
"Weakness in reaction to the news has violated the prior significant near term pivot low at 228.66 (10/30), triggering the Bearish Scenario (Red line) that calls for a deeper correction that projects into the 220 area next, and if violated, to the 205 - 200 target zone.
On the evening of November 30, after Zoom Video Communications (ZM) reported earnings, Mike Paulenoff cautioned MPTrader members about the stock;
"My pattern work argues that ZM started a major correction off of its 10/20 all-time high of 588.54 into the 11/10 low at 366.28. The rally from the 11/10 low at 366.28 to today's high at 487.79 (+33%) to my mind represents an intervening recovery bounce prior to a second bout of weakness that completes the larger corrective process.
During late November into early December, Mike Paulenoff became increasingly concerned about the price behavior of Facebook (FB).
The stock not only was grossly underperforming the NDX but also was in the news constantly in an unflattering light regarding its leader, Mark Zuckerberg, and censorship accusations. Since early November, the NDX is up about 10%, while FB is unchanged.
On Tuesday morning, December 8, with AAPL trading in pre-market action at 124.64, Mike Paulenoff told MPTrader members to watch for more upside:
"AAPL is following a similar, if less exciting post-coil breakout price path than did TSLA one month ago. My attached 4-hour chart shows that since the end of the Sep-Nov coil formation at 112.59 on 11/24, AAPL has stair-stepped to the upside to this AM's pre-open high at 124.96 (+11% so far), in route to a challenge of the 11/09 rally high at 127.
