Well, good evening, everyone. Hey, it is Shooter. We are going to go over primary waves.
I've not done one of these in a little while. Of course, it's Scott Henderson. And at the end of our presentation, please do review our disclosure. All right.
Now, we've changed the format a little bit on primary waves, sort of a new and precise. You know, now that I've pretty much got artificial, well, not it's constantly it works in progress, but. artificial intelligence has really helped me expand on my horizon. In short, I've never been a slouch kind of guy. I could be the guy who uses AI to reduce the amount of time that I put into my work, obviously, which is probably what I should do, but we're not doing that.
I want to improve upon my work, and AI is really allowing me to take that to a new level. because I constantly want to strive to become better at what I do. So in all of our modeling that we're doing, the key fact is AI can look at the setups that I perceive and rank them.
And ultimately, that's what we're trying to get to in primary waves. So everything in this primary waves moving forward is going to be a setup that ranks. So I may have loaded 50 charts into artificial intelligence with a specific criteria. And then it comes back and basically picks the best setups for me and then ranks them based on that criteria we've designed.
I mean, which I think is just fabulous because I could not accomplish that in a week with how thorough this process has become for me. So now, obviously, with backtesting and everything else, that should help us get a little bit further. But in looking at a primary waste setup. Anyway.
A primary wave degree or above is the first criteria. So we want two wave intersections to cross at our divergent high or low. And what I mean by divergent is we've already received a confirmed high or low on a basing pattern.
In a structural wave, we don't have confirmed highs or lows, but we still do have divergence in RSI on those crosses. Ultimately, that's it. Then we're looking for a shift in volume, and then ultimately the Vigit 2 strategy to give us a buy signal based on that criteria.
So ultimately, we are targeting in this structure of this primary wave setup a minimum of 50% back of $114.46 from where we are. Might take us three months, might take six months, might take us five years to get back there, but the setup's there. So we want that cross. We want the RSI structure there.
We want multiple. um confluence between the time frames so they sort of mend together um our risk really is going to be the prior low here just above the primary we've set really we're early here early so unless it takes out that 2767 um i wouldn't think it's horrendous you want to add above so you're going to put a position size on add above 3884 at a full position size at 4924 with ultimately a first profit target of 68.64 if we don't accelerate. Now realize we don't have much resistance here. There's not a big band and there's a huge gap to where we're going to run and do resistance up here around the 61.8.
So this could accelerate if the numbers come out great for this particular stock. Now let's jump into what we are looking for as far as trading strategy. Obviously, accumulate common shares is always the case in a primary rate because these are position trade.
In other words, we're going to hold on the minimum of three to five months and maybe as much as three to five years. Now, I have not gone back and vetted these names to the VSL, right? Because the criteria that I'm looking for outlines the primary wave setup period, and that may differ from the VSL. And I don't want to exclude names because the setup is a setup.
kind of thing. So obviously, if you want to vet it, just like according to earnings, etc., you feel free to go vet these names from the VSL. That's going to be your call, not mine.
I'm going to do my work, tell you what I like, and then you guys can take it or leave it. No offense. All right. So we're looking at March $45 calls initially or sell April $30 puts.
You can actually do March, April, May. Maybe even May 50s, go out there, maybe earn a couple more bucks on those. But I don't know that I would go higher than that, would be the thought. All right, let's look at CBOE. Again, CBOE.
Now, something I don't like, and, you know, I always have something I don't like, but is where the MACD cross. I mean, we could roll back. You know, we have a trend.
It's not actually drawn here, but we have a trend support line, which comes in probably around 195. But that really is flagging to me. It looks like we get up and out. So I really would think about chasing the breakout here above 207.17.
So just put a full shot on them. We're targeting our three up there. Our T2 target up around that 221. Obviously. Risk to me is just below the prior ledge. Instead of this low, I'm going to this low and saying, hey, as long as that holds, I'm good with chasing this long.
Think position size because it's not as clean with this look. I'd rather have the back test. All right. So primary wave set up. We're saying wave two back test is here, but it could slide down to that 195. Just keep that in mind.
So looking at the strategy, maybe March, April, 220 calls, 225 calls. and sell April 190 cash secured put. All right, let's look at AVGO. Now, the collective here is that it's already put in the low and the account is going to reset because we have bounced when I was prepping this all the way up to 221 from this low.
That's too much of a bounce. I don't think we come back off that. So we had the seller exhaustion. Look at the wick on the off number for us to close.
I mean, that to me is pretty solid seller exhaustion. They came in and bought this. Also, if you look at your volume candles, where we get these spikes, it just runs.
So I'm thinking we get this spike and we run. Maybe it's like, you know, look at the spike here and look at how much we run, right? Look at this spike here and how much do we run, right? So this stock has an MO to like to run to the upside when we get that spike.
And I really think that's the case here. All right, so AVGO, I think T2-61-8 is totally viable. Our 78-6 is up 272. I think that's totally viable as well. Let's look at the strategy. March 250 calls.
April, May as well. And sell maybe April 200 cash secured puts would be my thought. All right, snap. Nice base here. However, I don't know that it's done, but it is broadening.
Notice the broadening formation here. So the broadening formation, if we draw a line from here to here, it puts us up towards our three around 26. So that's the most likely place for it to go because broadening formation is down here. We've tagged it, tagged it, tagged it. It's going to get out. So.
The bias is to the upside. First target is going to be $17.91, roughly $18, which is T2, from this $11. So this is a nice move, 70% move to the upside.
Nice, nice move. Let's look at the, well, I can actually come back for a second. So risk, the primary wave 2, $10.40.
So we're risking right now $0.89, $0.89. Now, let me talk about risk when I put risk in here. And forgive me, my throat's just a... a tad bit scratchy, so we're going to take a spike.
Risk is twofold. One, either you're all in, and when I say all in, you buy 10 contracts, set your stop, and then you specifically set a spot to add. For example, the breakout here, which by the way, I apologize, I don't have highlighted, but above about $13.75, you want to have a full position size on because that is technically a breakout, right?
So you want to identify where you want to add. So above $11.90 is where I would add. And then the breakout, I would have a full position size, ultimately with my goal of a target of $18.
So the risk is, closes below this low, you either take 50% off, okay, or you're all in and you close the trade because you're going to, you know, you have a 50% trailing stop. Or you structure the trade to scale in. So you put 10 contracts, 5 contracts, whatever it might be, based on what position size you've delegated to your account.
And then it breaks down and it gets, you know, because usually what we get is about 50% of what the leg is. So if we, this is our low, higher low, it breaks down. We get a new higher low, but it's still a higher low.
And then you come back and add back into that position. A little riskier, a little more time management. And you can be wrong more often than not.
Personally, I like to structure trades, especially like Snap with this kind of base, where I'm scaling it. So as long as it keeps working, I'm going to add. As long as we don't get below that 1040, we're good.
So I'm going to start off probably with a quarter position size, add a quarter position size above 1190, add a full position size above that 1375. And that's how I'm going to run with it. And then I am running a scaling trailing stop, 50% trailing stop on each of those positions. So as I add the five or 10 contracts, depending on what I decide to go with it, each contract I buy has its own trailing stop.
All right. that way i can come in and tighten those up so when i have the first entry and i'm well into the money i want to capitalize on when i have the second lot which isn't quite as well into the money i want to capitalize on that etc it automatically forces you to scale in without a lot of work you don't have to go back and babysit which is something that i just try to avoid i don't like to be not that i don't like to babysit my grandbabies i mean just so many different symbols that are open all right so snap march may 15 calls and uh uh april ten dollar cash secured put right all right let's look at snow i actually really like this chart beautiful thing really is i mean this just was i mean just clean look at the diverge okay so we sort of got like a double bottom that came in right here right so this is the confirmed low this is the divergent low has a tight range we're going to the top of the range so you know we're going to go back to about this 234 nice euphoria on this breakout i mean it looks really good t1 target is going to come around 207 so about 30 bucks from where we are nice upside Risk is the 170.86. Little deep, if you have a 50% trailing stop, you'll get taken out with that if it does. But April, May, $20 to $25 calls. And cash secured puts would be March 150, March, April 150 put.
Okay. Now, something I've got AI doing is it's picking my strikes. So it's going in and looking at options data. And it's looking for that unusual option activity. So that's one reason the timeline might necessarily reflect.
what I would normally do as a strategy to some degree. Now, whether or not I stick with that or not is still to be determined, but that's ultimately what we're producing. So, you know, in mind, you want to look at strikes that have a thousand plus contracts for that given symbol, at least in one strike for the date that you're trying to take, and preferably more than that. So let's take a look at UPST.
Nice look. clean back test, nice channel to the upside. You know, we're building out this base here, so we should get up here and then we probably come back and test a little back around 64 after we get up here.
So risk is going to be this 5732. T1 target is going to come in there right around 8617, T2 around 103. Now looking at the strategy here, option would be March, April, May, $80 to $85 calls, cash secured puts around 60 bucks. So that's what I have for this issue. Now, whether or not we get one out next week is going to really depend if we have new setups that meet that criteria or not.
OK, because we are only posting new setups within primary waves that are set up. We're not we're taking all the noise out of it. So we want primary wave to be a actionable article, period. It's sole purpose. All right.
Final thoughts. Best setup is UPST. Strongest risk reward.
Second is Mitch. Best multi-time frame setup, right? Third is Snap, early stage.
Fourth is Snow. Wave 2 pullback is absolutely textbook, right? Fifth is CBOE, strong Elliott Wave alignment. Watching that breakout above 207, which confirms the upside. Then we have ABGO in 6, and then CAVA in 7. The only reason CAVA's in 7 is continuation play.
But... I still like it, you know, as far as, you know, conviction to the upside. So bottom line is lay out your trading plan from this article. Scale in.
Mitigate your risk. Sell into rallies, especially on names that you may be holding. You know, try to raise some cash on those other names and rotate towards names that have decent setups to the upside, a.k.a. like these primaries.
All right, folks, that's what we've got for this week. Great trading. Until next time.