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 4^th 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
Breakeven: $6.20

Greeks of this Trade:
Delta: Short
Gamma: Long
Theta: Short
Vega: Long

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
Breakeven: $19.70.

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
Reward: Unlimited
Breakeven: $37.35

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 4^th 34 calls for $1.34. With the options market implying a move of around $3.65 by April 4^th 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 4^th 34 Calls for $1.46
Risk: $146 per 1 lot
Reward: Unlimited
Breakeven: $35.46

Broadcom Corporation (BRCM) is a company providing semiconductors for wireless communications. The company’s stock is currently trading around $30.80 in a 52 week range of $23.25-$37.85. The stock has been performing relatively well this year with shares of BRCM rallying 3.85% year to date. The stock gapped lower this morning and options traders seem to think this move lower will continue through Early April. Earlier this morning a trader bought 5,000 BRCM Apr 4^th weekly 31.5 puts for $0.83. This is a very bearish trade that exposes this trader to `$415,000 in risk over the next 8 days. Although the stock is trading above the Ichimoku Cloud we believe that this orderflow could be signaling a short term top in BRCM.

My trade: Buying the BRCM Apr 4^th Weekly 31.5 puts for $0.90
Risk: $90 per 1 lot
Breakeven: $30.60

Ares Capital Corporation (ARCC) is an investment company investing in middle-market companies here in the U.S. The stock is currently trading around $17.45 in a 52 week range of $16.15-$18.63. The stock has been underperforming the market this year with shares falling 1.67% year to date. Options traders seem to think this trend will reverse as orders hitting the tape today have been very bullish. Earlier today a trader bought 2,500 of the ARCC Apr 18 Calls for $0.10. Over 6,400 contracts have now traded on that line against open interest of only 130. This is a very bullish trade that represents volume nearly 29 times the average daily volume in ARCC. The stock has rallied from the day’s lows after this trade took place. Although the stock is trading below the cloud we believe this order flow signals for a good risk to reward set up in ARCC.

Trade: Buying the ARCC May 18 Calls for $0.15.
Risk: $15 per 1 lot
Reward: Unlimited
Breakeven: $18.15