The Big 3: BABA, SPCX, SMCI

get your podcasts. Welcome back to trading 360. I'm Marley Kayden. It's time for the big three. We've got three stocks three charts and three trades for you. Alex Coffee taking us through the charts today. Here to take us through the trades. Don Kaufman co-founder of Theo Trade. Don great to have you back on the show. We've got a big slate of earnings coming our way after the bell today. How are you looking at the action we're starting the day off with? Well you know right now just the marketplace in general has been threading the needle around. The S and P s have been around 7511. They've been there. And threading that needle since, you know, May 4th, it's months inside of the same range. And, you know, today's action is just representative of, look, we're waiting for the big numbers to come out. I know a lot of people, there's emphasis on Google. Mine is predominantly though in, in Intel for, for really for the earnings season. Intel. That's, that's one way to kick it off over here because the chips the chips are what basically has gotten the market to where it presently is on a year to date basis and Intel. Look, it has to not just be good. It has to be absolutely spectacular numbers that we're going to hear. The market may not like it and they may not like it anyway. We could see some wild reversals at the remainder of this trading week. All right we'll hear from Intel tomorrow afternoon. We're going to have a big week of earnings. But let's dive into your first pick for big three today. You've got Alibaba here. They just released their latest L m the Quinn 3.8 max to some very positive reviews. How are you looking at Alibaba right now. Yeah Alibaba right now is a huge bid if you will. So I am really kind of following a lot of the Chinese you know AI kind of large market cap. And you know I think not myself alone in this, but most of us were actually surprised. There was another start up company with Kimi that was out the other day that even impressed any of the models that were here, including, you know, Claud's fable. So right now, look, there's a huge emphasis on AI. I think Baba's got its feet back under it, but I don't think it's going to last. I think we're actually going to use this opportunity to the upside. This stock just rallied from 90 all the way back to 120. And I'm I'm I'm going to step in and I'm going to fade it here. And I'm going to fade it right in the near term. I'm going to use the August 21st options expiration. I'm going to buy the 115 puts again by the 115 puts. Sell the 110 puts against it. It's a $5 wide put spread done for $1.60 debit. In this case again I'm using a bid that is buy side activity to to actually hop in and and fade that marketplace. And the entire, you know, S&P Chinese, you know, large caps, they've been oscillating back and forth. So any opportunity I can get to, you know, buy what looks like a temporary bottom, fantastic to sell what, what looks like it's a little bit of a top over here. Go for it. Again, these oscillations, they're great for the traders. All right so Alex as I'm looking we're up 8% just on the month. Are you seeing the potential for a top here for Baba. Well what I'll start with here Marley if we can. It's going to look a little different than Ric. So I apologize to the the Chart Master fans, but you can see why Don's looking this way. This is the last one month of trading. Here of course is the higher end of the range. We're basically in that this red area represents basically where his trade would be losing money break even at one 1340. And then the positive zone below that level. So first more of a look at really where that trade works. You can see fading that recent one month move. Looking for a move into that green zone below. One 1340. But look at a couple indicators. Now we've looked at these indicators. Marley, for those who have caught market on close, oftentimes with the S&P 500, for me this is just very, very, very quick high level trend recognition as well as momentum indicators. So what you'll notice is I have a five day EMA represented by this purple line. And I have a 21 day EMA represented by this teal line. And so one of the first things that I do when I look at that is I, I look at where price is relative to those moving averages and where they are to themselves. Right now. Alibaba is starting to break below that one week, one week moving average, which can be a short term support level, but it's sort of in a situation where the trend is not entirely clear. And the reason I say that is while the one week is above the one month now, price is in between that envelope. So you might be watching trend start to shift. You then look below down here at RSI and you're starting to see the same thing. It's starting to teeter off just a bit and work its way towards 50. So combine that with the fact that if if we can hear guys zoom out just a second, what you'll notice is a series of lower highs in this stock. If this is in fact a high, very much in a longer term downtrend going back to the beginning parts of the year. So if you're thinking like Don is perhaps a short term pop and a longer term downtrend, a chance to fade the move. Yeah. I mean we've certainly seen a nice pop in this name. Although pulling back again today we're down about one point 1.75%. Right now we're at 11589. So only about $2 above that break even for the trade that Don just gave us there. Don. This next one I was excited to see in your big three, you've got space X. We know we're going to hear about their earnings for the first time as a publicly traded company now on August 4th. But I guess my question to you is, how are you looking at space X? And is it time to buy space X for those who haven't yet? Yeah. You know, that's, that's the one thing I want to start with is I think a lot of traders, a lot of retail traders specifically really kind of felt left out in this IPO. Look, you could have gotten the stock at 135. It traded 150. It traded over 200. Look where it is right now. You didn't miss anything. And the opportunity at this point is not necessarily just to go into the marketplace to rush out there and say, that's it. I'm going to pay 120, I'm going to pay 122 I like the idea at this point. And again, I'm going to leave some of the technicals to, to Alex. Alex, there's not very many technicals here because there's not many trading days. But the point being is there's been some sell side activity in here. I don't really know exactly where the bottom might be in space. I mean valuation this is one of the toughest ones on the fundamental side to even look at. But I know one thing, I can actually choose my entry point, and I'm not going to choose it by going out and buying the stock in the open market, I'm going to choose my entry point by selling an out of the money put. And in this particular case, I'm going to sell a 100 put. Now, for those of you that have no idea, like, you know, selling a naked put, it feels scary. Unless of course, you really want to acquire the stock. And that's exactly what I want to do. I'm going to sell. Okay, the August 21st again, the August 21st 100 put, I'm going to do it for about $4.60. So what am I doing? I'm saying, look, I'm willing to buy the stock at 100 all day long. Okay. Do I actually get put the stock at 100? Possibly. If the stock trades under 100 I could get put the stock okay. Of course the credit for 60 is being received. You know I'm getting long this underlying in and around, you know 95 and change. So I think it's a wonderful opportunity to kind of pick your place and say, you know, look, I picked 100 in this case, just a nice round number. I think if it gets to 100, a lot of people might actually pile in and be like, this is this is our time, but this is actually giving you a credit to buy that stock at $100. All right. So, Alex, we only have 30 days to look at. Of course, when it comes to space in terms of being publicly traded. But take us through the setup here and also the trade that Don just offered there and the potential to then hold space longer term. So first off, there actually was a little bit over a month. So some of that actually got cut out. But what you've seen is a stock that's just been trending lower, right. Just lower lower, lower. We start in the green zone though. So if we compare this to where, you know, the last trade started in the red zone, you need the move. In this case you just need this stock to stabilize. And I think what Don really pointed out that is the most critical piece is if you did this strategy to collect a credit, great. But if you did it because you wanted to buy the stock, then the red zone is actually not a bad thing. It's just a chance for you to potentially get put that stock at a lower price. But let's go ahead and move to the last bit. Since the IPO. Same indicators. You can see the RSI doesn't have a ton of information yet, but at 37 it's certainly in the closer to the oversold area you can see the move has been pretty consistently lower. You look at the the setup here with our moving average, the one week, the one, the one month below both of them, this is certainly a counter trend type of a trade, but you look at it being more neutral to bullish construction selling it below the market. You're looking for this potentially to slowly bottom out. But look we're looking at a little bit over a month worth of trading. So to Don's point, there's really not a lot of price action to go off of. It's been a volatile stock. But look at several red candles in a row. Now we're starting to see two green ones in a row. Perhaps you are starting to see some signs of bottoming out in space now. Still trading more than $10 off of its IPO price. We're at 124 and some change for space, so still highly discounted. Opened at 150. So way off of those numbers. This last name, I'm curious to know, Don, if you had in mind before or after we got these prelim Q4 numbers, we're seeing a major pop in Supermicro up 24.5% right now. They significantly upped their margin expectations, almost double in fact had a record $60 billion backlog. Did that tie into Supermicro being in the big three today. Absolutely. Look I'm actually in Supermicro and talking about it right now because here's another one. I want to fade this marketplace. Look this is a company that has been just ripe like just ripe with controversy scandals. I mean, just very, very widespread throughout the throughout the company. There have been a number of discussions of, of even fraud at this firm and accusations of, of such, you know, in the past. And any opportunity I can get to fade this marketplace, I'm going to take. And, you know, I saw this come up kind of on the radar screen this morning. I thought, I don't know, it's a little dicey. This one's really moved up a little. Look, the more it moves up, the better it is for me at this particular point. Now I'm going a little bit further out in time. And to me, this is less about the technicals and much more about the fact that any, any bid under this marketplace that substantiated. I want to fade it. I'm going all the way out to the September 18th expiration. And what I'm going to do in here is I'm going to buy a put spread. I'm going to buy the 26 puts. I'm going to sell the 21 puts against it. Now, the stock has been moving considerably since I've kind of put this together. And you know, I was looking at paying a $2 debit for this $5 wide spread. But even that $2 debit has gone down. Just, you know, in the last few minutes since the stock has actually rallying a little bit. So again, I'm just trying to be an opportunist. I'm trying to take advantage of a marketplace that has been in decay. I mean look this stock has been getting hit and hit hard. Any opportunity to fade it. I'm going to take that. All right. So as we look at Supermicro with that pop that we're seeing today of 24 plus percent, take us through what you're seeing in the chart. Yeah. First off, much like what we saw in Alibaba, not quite to the high end of the range. But you look back to the early parts of the last month over by where Marley was standing. You can see we're up in that upper parts of the range over the last month. You can see over here the red box representing the loss portion of that example trade from Don and then green representing where you would need the stock to be a little bit over, you know, basically a couple months now. So you have some time for this to, you know, get back down if it's going to. Now, as we zoom out, we go to the year to date chart here, same indicators, just a very different looking chart as opposed to any of the others that we looked at. And one of the things that I think really stands out clearly is that this stock tends to be very news driven. So you see back here, big gap move. You see here, big gap move and then off to the races as well to the upside down side. And then of course this candle that we're seeing here today. So certainly a stock that can make big moves make them quickly. But one thing I want to highlight as well, a little bit more of a bullish configuration short term technically just because of today's move. But if you discount that what you'll notice it's going to be difficult to do this straight. But we're getting to an area where we spend a lot of times at the early parts of the year going sideways. So you have a ton of potential resistance and overhead supply that's coming into play here shortly. So if you look at how Don is big pop today, perhaps an opportunity to fade the move, especially as it's about to run into some more critical price levels if it continues on this trajectory. All right. Right now another volatile move, this time to the upside more than 24%. We are at 3163 for Supermicro this morning. Don, thanks for being with us for big three today. Don Kaufman,