• Email :trent@omahacharts.com

I Come Bearing Gifts

…In the form of potential out sized gains and attractive risk/reward setups. We have seen the makings of a major move higher in the banks and financial institutions lately, and while I believe there is plenty of meat left on that bone I am out scouting out some lesser watched names. I have positions in $GS, $C, $BAC, $JPM, $MS and now looking at $WDR.

Waddell and Reed through its subsidiaries, provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. I’m sure you have heard of them but they might not be a part of your sexy bank stock list. Well let me show you why they should be…

 

WDR has carved out a very significant base of buyer support at and just under its current price level. Above this current price level is a significant thin zone in the volume profile. We know from experience these areas are where stocks tend to “get fast.” In other words, as $WDR trades its way above $21, less and less volume has traded hands there and price will look to make a move quickly through the pocket. The next volume node isn’t until the $33-38 range and that is fairly insignificant. This could easily be a $45 stock.

I don’t think it is necessary to get cute with options on this one. Rather a smart long term play would be to buy shares and sit tight. The downside risk is seemingly very minimal and the upside opportunity is huge. I’ll be looking to move some things around to make room for a 3% position in my long term accounts.

Thank God it’s Monday.

OC

Posted by Trent

One Comment - I Come Bearing Gifts

  • avatar

    Teddy Bear July 9, 2018 reply

    I may hop on if we get a pullback. Will likely go with ITM December calls instead of stock. Only because i am cheap.

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