It’s what we’ve been telling our clients, and it’s been our mantra internally.
This has been the top pattern to profit from lately. Period.
It’s simple, reliable, and works best in bullish environments like this one.
I’ve been putting more and more money behind these patterns over the past few weeks. Not only do they keep resolving higher, but the reaction legs have been fierce— some going flat-out vertical.
After a strong leg higher, $MU formed a textbook bull flag. I bought the $MU 7/18 $120 calls right in the middle of that range, betting on the next leg up.
The stock took out its VWAP and ripped higher almost immediately.
I followed my process, sold half into strength, and locked in the remaining gains this week.
On the same day as $MU, I also purchased some Citigroup $C 7/18 $ 82.50 calls for $1.00.
It was a similar setup with a similar outcome.
Citigroup is riding an impressive reaction rally as we speak.
With the big bank running into resistance at its old highs, I’ve taken just about all my position off. The calls are trading for around 4x what I paid.
But this kind of setup isn’t just showing up in semiconductor stocks and banks… we’re seeing these coils everywhere across different areas of the market
And we want to treat them all the same.
Semis. Banks. Industrials. Cryptos. It doesn’t matter.
We want to keep buying these bull flags and anticipating upside resolutions.
I’m going to do it as long as the market continues to pay me for it.
Today, I redeployed some of those bull flag profits into fresh coils. They haven’t resolved yet, but our volatility squeeze indicator says they are ready.
I went with some index plays because the charts were just too good to pass on, and I like the broad exposure they offer.
We’re going to buy some more calls in the coming days, in individual names.
