Checking Up on My Weekly Watchlist

• My favorite plays from this week…
• The world’s biggest short squeeze, Reddit’s favorite pharma company, and crypto stocks…
• See how the charts developed, how my predictions held up, and the plans for my next trade…

Hey, Evolver.

At the beginning of the week, I posted my weekly watchlist. It included many names we’ve been discussing over the past several weeks. 

Since I published the list, volatile price action brought about some interesting shifts and reversals. I feel that’s worthy of discussion.

Let’s go over the stocks I’m watching closely into the end of this week. Read on to learn why I’m stalking them, which levels I’m bookmarking, and how you can potentially trade them.

SPRT Short Squeeze Fizzles Out

On Tuesday, we talked about the epic short squeeze happening in Support.com Inc. (NASDAQ: SPRT). 

Going into this week, I was on the fence about which way the chart was leaning…

On one hand, SPRT got rejected right before the $60 level. We’ve discussed this idea before. When price action fails to break a big round number on the way up, it’s often a sign that the chart’s heading lower. 

On the other hand, SPRT was moving extremely quickly on high volume. SPRT was also holding the $30 level steadily. This led me to believe it could be gearing up for an even bigger squeeze to $60, $70, or even $100. 

Note: If such a squeeze takes place, it will be worth the wait. At that point, the downside could be enormous.

But Wednesday’s price action seemed to send a clear message that the chart’s heading to the downside. Moments after the bell, SPRT was already down more than 15%. 

Meanwhile, options prices are still insanely high. And I’m still sitting on the sidelines.

MRNA’s Inflection Point

Another crazy stock I’ve been following closely over the past month is Moderna Inc. (NASDAQ: MRNA). Ever since it joined the S&P 500, MRNA has been on a rip-roaring momentum surge.

It’s easy to get caught up in a social-media-driven bull rally. Sometimes it seems like these supernova runners will never reverse…

But let’s not forget how far this chart has come in just a few short weeks. I’ve said it before, and I’ll say it again — focus on the big picture.

I had the big picture in mind when I was trading MRNA puts last week. There was a big panic off of the $400 level. This was the move I had been patiently waiting for. 

Just before the close on Friday, I bought 9/3/2021 $360 puts for $5.55. And right after the open on Monday, I sold them for $10.50 — a gain of 89%.*

This wasn’t a huge position. But remember — singles add up. Don’t be greedy. Take your small wins and move on to the next trade. 

Honorable Mentions

GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC)

The meme stock giants got rejected at key levels yesterday, just as I predicted. As soon as these charts gapped up, topping signs started to show immediately. 

I called this first thing in the morning on Wednesday, and the price action played out as I expected intraday.

Novavax Inc. (NASDAQ: NVAX)

I added this to the watchlist after it started breaking out yesterday morning. This is a speculative play, so treat it as such. 

That being said, I’ll be watching the $260 level as a key area. That’s where the chart could fail or break out to further upside.

Riot Blockchain Inc. (NASDAQ: RIOT) and Marathon Digital Holdings Inc. (NASDAQ: MARA)

As bitcoin (BTC) hangs out around the $50,000 level, I’m watching crypto stocks like RIOT and MARA closely. 

If BTC breaks above $50,000 on strong volume, the options on these stocks are a juicy way to play crypto swings. Trade accordingly.

Lesson Summary

• SPRT price action played out exactly as I expected … But the options premiums are still too pricey to make buying puts advantageous. 

• If SPRT makes another run beyond the $60 level, that could be the opportunity Evolvers are waiting for to buy puts with massive downside. In the meantime, sidelines.

• MRNA is at a key pivot point, rangebound between $350–$400. A break below or above these levels, respectively, could give me the conviction I need to put on another MRNA trade.
  
• GME, AMC, NVAX, RIOT, and MARA remain high on my watchlist. I’ll be watching these charts for my setups to present themselves. 

Conclusion

The watchlist is shaping up nicely. I think we have plenty of interesting trading prospects for the end of this week. 

Many of these plays could continue into next week as well. Watch closely on Monday.

Keep your mind on the big picture. Keep your eyes on the key price levels. And if any trade starts reversing on you, cut your losses immediately.

Watch and learn,

Mark Croock

Editor, Evolved Trader Daily

P.S.

*All content in this newsletter is intended for educational and informational purposes only.

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