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When To Play Wile E Coyote With A Hot Ticker

September 13, 2022  |  Steven Place

Most investors spend the bulk of their lives chasing after hot names.

They’re like the “Wile E. Coyotes” of the stock market… they’ll strap explosives to their back and roller skates to their feet…

And chase after the elusive Road Runner that can never be caught.

No matter how many times it blows up in their face, they just can’t help themselves.

However, on the rarest of rare occasions, you actually can find a sustained breakout…

Take Enphase, $ENPH:

ENPH Chart

ENPH Chart

It’s one of the hottest stocks in the market right now…

Coming off a monster move from a smoking earnings report and getting follow through from favorable legislation out of congress.

The new “green stimmy” package that is the Inflation Reduction Bill will almost certainly not stop inflation, nor “cool the globe”...

But it will do something that congress is actually good for… spend a crap ton of money on renewables.

What you think about renewables and their potential to meet energy needs going forward is irrelevant.

Congress wants to spend on it, and that means there’s money to be made.

Now, often when a stock breaks new highs, the coyote is already gearing up to chase…

But, to play it smart, what you want to see is some sustained sideways action so it can build out a base.

The Trading Roadmap we offer shows us a very good level to keep our eyes on…

ENPH Chart

ENPH Chart

The highlighted yellow boxes show us two shelves where a lot of volume was traded.

For the first half of the year, the stock was a choppy mess, slowly creeping up just before the earnings breakout.

But what is important here is to see how much volume is being built out at this higher range. It shows significant institutional interest. 

Given the recent buying “wicks” over the past two trading days, we can see institutional capital is very interested in this name.

I don’t know if this thing is going to skyrocket to $400, but it currently has the “tailwind” of strong institutional owners of the stock who are well positioned and have no reason to sell as we see higher prices.

At PVA, we anticipated this, because there were some hidden clues showing us that price was being accepted and initiative buyers were showing up on the dips.

We’ve already scaled out of some calls for an 84% return– that’s $1,910 per contract. 

I’m pretty sure that’d go a long way to taking the sting out of rising prices and help you patch up your portfolio a bit from the train wreck of 2022 so far.

If you want to know more about how we spot these levels and use our Trading Roadmap to find massive moves that can fill your pockets…

>>> This Class Will Show You How

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Steven Place
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