My favorite technical indicator is the Ichimoku Cloud also referred to as known as “The Cloud.” This indicator is a free plug-in on TradingView, but a trader must know which time frame to use for the indicator. The Ichimoku works best on the 4 Hour bar for forex and today we see a great signal for a mild pullback trader who likes to trade with the trend.
Let’s breakdown the trade:
Short EUR/USD at 1.378 at 12PM CST on the close of the bar
STOP LOSS: 1.3835
Target #1: 50% of the Stop: 1.3752
Target #2: 100% of the Stop: 1.372
Target #3: 150% of the Stop: 1.369
Target #4: 200% of the Stop: 1.3656
Once I hit Target #2, if I want, I can move my stop to breakeven.
Plug Power Inc. (PLUG) is an alternative energy technology provider which engages in the design, development, commercialization, and manufacturing of fuel cell systems for markets around the world. We have noticed some interesting unusual options activity in PLUG during today’s trading session. Earlier today, a trader bought 7,000 of the PLUG Apr 4th weekly 7 puts for $0.80. This is a very large order that had this trader putting $560,000 at risk. We believe that order flow this strong sets up well for a short in PLUG with a good reward to risk set up.
My Trade: I bought the PLUG Apr 4th Weekly 7 Puts for $.80
Risk: $80 per 1 lot
Reward: $620 per 1 lot
Greeks of this Trade:
Teck Resources Limited (TCK) is an integrated mining company with operation in Canada. The stock is currently trading around $21.65 in a 52 week range of $19.98-$30.02. Shares of TCK have been underperforming the market this year with stock falling nearly 17% year to date. Options traders seem to think this trend will continue as orders hitting the tape today are decidedly bearish. Early in today’s trading session a trader bought 6,000 of the TCK May 20-18 put spreads for $0.33. This is a bearish trade that requires this trader to lay out nearly $200,000 in premium. This block also represents volume over 6 times the average daily option volume in TCK. With shares of TCK trading well below the Ichimoku Cloud and a downward sloping future cloud we believe that this bearish order flow in TCK can justify a short position.
Trade: Buying the TCK May 20-18 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Quanta Services, Inc. (PWR) is a construction and engineering company that provides solutions to the electric, natural gas and oil industries. The company’s stock is currently trading around $36.85 in a 52 week range of $25.26-$37.28. The stock has been strong this year with shares rallying nearly 17% year to date. The options tape has been very bullish today with large blocks of out of the money calls being bought. Earlier a trader bought 2,287 PWR Apr 36 calls for $1.25. This is a very bullish trade that also represents volume nearly 7 times the average daily option volume in PWR. With shares of PWR trading well above the Ichimoku Cloud it is likely that this trader is speculating on further upside in the stock rather than hedging a short stock position. We believe that the chart and the order flow in PWR is strong enough to justify a long position in PWR.
Trade: Buying the PWR Apr 36 Calls for $1.35
Risk: $135 per 1 lot
FirstMerit Corporation (FMER) operates as a bank holding company for FirstMerit Bank, N.A. that provides various banking services to its customers. We run a proprietary scan of all stocks that break the Ichimoku Cloud to the upside and downside on the daily chart every single day. Yesterday, out of 30 stocks this was the best signal we saw. So, based on the downside break of the cloud I got short FMER.
The Trade: Sell FMER Stock at $20.33
STOP LOSS: $22.33
Target #1: $19.83
Target #2: $19.33
Target #3: $18.83
Target #4: $18.33
Apollo Education Group Inc (APOL) is a provider of private education via programs online and on campus. The company’s stock is currently trading around $33.20 in a 52 week range from $16.54-$35.92. The stock has been performing very well this year with shares rising more than 21% year to date. APOL is set to report quarterly earnings on April first and we are seeing some interesting unusual options activity leading into the release. Earlier this morning a trader bought 1,000 of the APOL Apr 4th 34 calls for $1.34. With the options market implying a move of around $3.65 by April 4th expiration it would appear that this trader is getting long the stock expecting a big move higher on earnings. We believe that this order flow is strong enough to signal for a long position in APOL.
Trade: I bought the APOL Apr 4th 34 Calls for $1.46
Risk: $146 per 1 lot
AOL Inc, (AOL) is a global content and site management company with many different offerings and a worldwide audience. The company’s stock is currently trading around $45.20 in a 52 week range of $32.19-$53.28. The stock has been underperforming the market this year with shares falling around 3.2% year to date. Despite this weakness options traders are painting the tape with some very bullish orders in today’s trading session. Earlier this morning a trader bought 4,700 AOL May 50 Calls for $1.35. This is a very bullish trade that requires this trader to invest $634,500 in capital. Over 5,300 co0ntracts have now traded on that line along with opening activity on the 49 and 48 lines as well. Although shares of AOL are trading below the Ichimoku Cloud they are making a strong move higher today and with bullish unusual options activity hitting the tape we believe that AOL could set up well for a long position.
Linn Energy, LLC (LINE) acquires and develops energy assets in the U.S. The company’s stock is currently trading around $27.75 in a 52 week range of $20.35-$39.47. The stock has been very weak this year with shares falling 9.75% year to date. Options traders are expecting this trend downward to continue as we have seen some very bearish action in LINE today. A trader bought 24,277 LINE Apr 26 puts for $0.60. This is a very bearish trade that requires this trader to lay out nearly $1.5 million in premium. With shares of LINE trading well below the Ichimoku Cloud this bearish options order flow provides a signal for a short position in LINE.
Trade: Buying the LINE Apr 26 Puts for $0.60
Risk: $60 per 1 lot
Nokia Corporation (NOK) is a company based in Finland who manufactures mobile devices such as smartphones and lower priced entry level phones. The company’s stock is currently trading around $7.14 in a 52 week range of $3.02-$8.20. The stock has been massively underperforming the market this year with shares falling just under 12% year to date. Options traders are looking for further downside in NOK as we have seen some very bearish orders hitting the tape during today’s trading session. Earlier this morning a trader bought 19,847 NOK Jul 6 puts for $0.28. This is a very large block and also represents volume over 2.2 times the average daily option volume in NOK. With technical weakness in the stock we believe that order flow this unusual provides a signal for a great short opportunity in NOK.
My Trade: Buying the NOK Jul 6 Puts for $0.30
Risk: $30 per 1 lot
Reward: $570 per 1 lot (if stock goes to 0)
CareFusion Corporation (CFN) is a medical technology company with operations around the world. The company’s stock is currently trading around $39.45 in a 52 week range of $32.48-$41.98. The stock has had a relatively sideways year with shares falling 0.85%. Despite this relative underperformance options traders seem to think shares of CFN will rally through June expiration. Earlier today a trader bought 2,190 CFN Jun 41 Calls for $1.52. This is a very bullish trade and represents some very unusual volume in CFN. More than 24.4 times the average daily option volume has now traded in CFN. Although shares of CFN are breaking through the Ichimoku Cloud to the downside we believe that order flow like this signals for a long opportunity in CFN.
Trade: Buying the CFN Jun 41 Calls for $1.60
Risk: $160 per 1 lot