Good morning, Power Profit Traders!
It’s Friday before a busy week of earnings, so you know what?
I’m gonna make this short and sweet so you can jump in the room and watch Team Tom LIVE at 10:30 a.m. ET, then enjoy the rest of your weekend.
Wednesday was a potential turning point in the market, as stocks reversed off a huge down day to close higher.
I told you yesterday that I needed to see some follow-through to feel more comfortable that this wasn’t a dead-cat bounce, and on Thursday we saw that continued upward price action.
Wall Street cheered the weekly jobless numbers and news from Capitol Hill about the debt ceiling, and against this backdrop, I thought I’d continue to keep an eye on where the option bulls are circling.
So today’s Power Profit Trades Watchlist — on the right side of this email — is once again the Unusually High Call Option Volume List, courtesy of my Morning Report tool. (For a description on how to read the Watchlist, check out the Tom’s Toolbox section below.)
As you can see, Tesla (TSLA) booted Verizon (VZ) from the No. 1 spot, perhaps as traders placed bets before the company’s shareholder meeting, which took place after the close last night. At the meeting, CEO Elon Musk announced plans to move Tesla’s headquarters from California to Austin, Texas.
Before the news, traders jumped on the TSLA $750-strike call expiring Friday, Oct. 29, as this option saw volume of more than 17,000 contracts in a single session.
Buyers of these calls are expecting TSLA shares to extend their climb above $750 into options expiration. The stock closed yesterday at $793.61.
It will be interesting to see which stocks crop up on our Watchlists next week, with big banks set to report earnings…
Until then, hop in the room and watch Team Tom LIVE at 10:30 a.m. ET right here!
Tom Gentile
America’s #1 Pattern Trader
