If you’ve been watching the market, you know it’s been a crazed mess…
One day, we’re down 500. The next day, we’re up 200… It’s insanity. But, it’s still tradable. In fact, if we pay attention to the herd, they’re actually pointing to big potential wins…
For instance, Ambarella (AMBA) is down more than $12 today on a warning. However, it’s now become aggressively oversold using our technical indicators. It’s also sitting at its 200-day moving average, which has served as great support dating back to September 2013.
If AMBA can hold this level, we should be able to milk a very quick gain from a likely move higher. Be cautious, though. Buy only a small number of call options here. Don’t risk the house. The fear is still absurd, but I believe most has been baked in.
Knowing that, consider buying to open the AMBA November 2015 80 call at market. It currently trades with a bid-ask of $7.70 x $8.40.
I’m also recommending that you take a small position in GPRO calls, as well… It’s also excessively oversold on our technical indicators. It’s also sitting at triple bottom support. If this holds, we can make some quick money on a likely oversold pop. Here, too, be cautious. There’s still a great deal of fear.
Knowing that, consider buying to open the GPRO January 2016 42 call up to $6.
Hold all other open positions, as well.
Ian L. Cooper
Forgotten Profits