These 5 Mega Stock Options Strategies to Seize Millionaire Opportunities!
3min read Whether you are an aggressive trader obsessed with day-trading options or a loyal fundamental investor, technical analysis can be a valuable barometer for evaluating the overall market or specific stocks to achieve speculative or hedging purposes. Every week, we will analyze the technical aspects of indices and mega stocks with market values above $100 billion to help you find good opportunities. Focusing on mega caps means you can access more liquidity to leverage and ride the momentum. Here are our latest findings.
S&P 500: Cross-Finger Time Coming
As the year-end approaches, the S&P 500's stunning post-election performance has cooled down a bit, as investors are satisfied with this year's performance and cautious about the outlook. The benchmark has been down for two consecutive days, with volume increasing by 7% compared to the first two days of last week. Also, notice that the MA(3) is moving downward and trending to break below the MA(7) and MA(10). If that happens, it implies more downturns for the S&P 500. However, as the overall sentiment is positive, the setback should not be significant for now. But you should take a cautious stance.
Based on this, investors may consider that beta deterioration will impact some heavyweight stocks, especially in the tech sector, though some stocks can weather the beta well. Here are today's top 5 recommendations.
1. Tesla
Rating: Cautious Sell
Believe it or not, Tesla's chart is showing some warnings. As the stock price officially went above 400 on Tuesday, proving the enthusiasm still goes, the psychological mark can always be a good point to sell. We can observe the spread between MA(3) and MA(7) is larger, similar to what we saw on November 11, when the stock jumped nearly 9% that day but then dropped 13% from its high in 4 days.
We recommend a cautious sell on Tesla shares. If you hold the shares, you can offload some to protect profits. However, if it's time to buy puts now, I may not strongly agree. Big whales often prefer pump and dump. They may first gap up, which has happened in Tesla several times before, to make investors believe more bulls are coming, and then officially pump the stocks. So if you see a gap jump next time, the perfect timing is here.
Action: Gradually offload shares; if a gap up happens, it's a good time to short.
2. Visa
Rating: Go Big or Go Home
Visa performed well on Tuesday, with shares jumping 1.4%, covering Monday's loss. It is also a cross-finger time for Visa now, as MA(3) is currently below MA(7,10) but with an upward signal. If MA(3) officially breaks above the other two lines, a technical bull is formed. However, if MA(3) fails, then the stock may go down deeper. The stock has been fluctuating at the current level since November 6, so it may experience more volatility from now on.
Action: Cautious buy as the stock MA(3) tries to break MA(7,10), but if it fails, it can be a strong sell signal.
3. Caterpillar
Rating: Strong Sell
Caterpillar has had an excellent year so far, with shares jumping 33% YTD. However, the construction manufacturer has seen shares consistently moving downward. For example, the shares leapt high but eventually closed only 1% higher on Monday, then dropped over 2.7% on Tuesday, indicating big whales are doing pump and dump. Currently, MA(3,7,10) are all trending lower, with MA(3) below MA(7) and MA(10), a typical sell signal. As the stock still sees moderate falls now, a bigger sell-off may be coming.
Action: Short it or buy puts.
4. Palantir
Rating: Moderate Sell
The national defense software company finally saw shares dropping these days, with shares jumping 5% at the open and finally closing -5% on Monday, and down 2% on Tuesday. The MA(3) is currently showing some fatigue. With a 312% massive return this year, surely there is more downside coming. However, we place a cautious sell because even with the return, RSI still hovers at 56, indicating the mania is limited. Also noted, Palantir options' volatility is quite high, so if a trader wants to play it safely, near-term options are not recommended.
Action: Limited medium-term puts.
5. JPMorgan
Rating: Moderate Sell
Bank stocks have seen a retreat in recent days as Trump's deregulation ambitions faded. JPMorgan's 46% growth this year also makes further downturns possible. Currently, JPM's MA(3) is below MA(7,10), and if the downtrend continues, a sizable pullback may happen. JPM options are attractive because bank stocks typically have limited volatility, thus a big setback may help your profits tremendously.
Action: Limited puts.
That's everything for today. We hope you enjoyed the article and become richer in the stock market. See you next time.
