Betting On PENN After Its Pullback
by Mike Paulenoff
September 26, 2020 • 12:12 PM EDT
In his Trading Room on Friday, Mike Paulenoff highlighted a trading opportunity in Penn National Gaming (PENN):
Mike wrote: "During the past week, PENN has been in the grasp of a corrective process (no doubt exacerbated by the announcement of a secondary offering on Thursday morning). The correction has pressed PENN into important support at 62.00 that extends down to 57.60, and includes the up-sloping 20 DMA, now at 62.06. As long as any selling pressure is contained above 57.60, the current pullback should resolve itself in another upmove that projects to 79-82 next."
PENN indeed held support, and went on to rally to over 70, closing at 69.85, up over 12% in just a matter of hours from Mike's initial alert.
Where is PENN headed next?
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More Top Calls From Mike
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Mike wrote that "the 500 point decline is nearing downside exhaustion," noting a preferred downside target zone of 3180-3200.
Fast-forward to August 20, when AMZN pressed to a new multi-month corrective low at 3175.76.
On August 3, Mike Paulenoff alerted MPTrader members to the developing setup in AAPL that also would eventually impact the broader market:
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Probably the first price pattern both fundamental and technical investors learn to recognize is a Head and Shoulders Top. Rightly or wrongly, it is the Holy Grail of technical formations, striking fear into holders of the stock, index, ETF, or commodity that exhibits such a technical set up, while eliciting an opposite reaction from put owners and short sellers who anticipate huge gains captured by impending weakness.
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Mike wrote:
This morning, JPM raised its Target Price to 175, one day after Citigroup raised its Target Price to 170. Do I hear 180... 185? Crickets at the moment. The Street is falling all over itself in its bullish view of AAPL.
