The Big 3: SE, Z, VRT

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. Rick Duquette taking us through the charts here to take us through the trades today. Mike Shaw director of trading education over at Prosper Trading Academy. Great to have you both on. Mike. Would love to get a thought on this. Nice and making sure we're holding on to it. Of course we're not. The Dow has moved into the red, but a mostly green day across our major averages. We got PPI this morning unchanged. How are you looking at the reaction we're seeing. You know it's not completely surprising. But I mean it's really hard to chase these stocks like here. So you know I I'm I'm definitely there's no reason to be bearish. But you know a more balanced approach, you know, buying things that might be lagging a little bit, selling things that seem to be overdone, that sort of thing. That's what that's what we're looking at. We have retail sales tomorrow, which could either kind of confirm the CPI and PPI prints from yesterday and today, or it could turn things around. All right. So then let's dive into your big three. You've bought see limited to us as your first pick here. They had a mixed earnings report. Shares are down today. They're down actually enough dragging them year to date lower. They're down about 3.5%. How are you looking at Sea limited Mike? Well, I mean, you know, the numbers weren't great, but I mean went up quite a bit and they could not extend those gains. And so we have a big gap from, you know, basically 115 up to 125 ish. And we've actually gotten into that gap. Implied volatility is low after earnings. And just in general. And and so I want to play this with a put calendar. All right. So a potential put calendar here for Sea Limited as what strike prices are you focusing on here Mike. What level specifically are you looking at? Yeah. So I was looking at anywhere between below 24 half. We're trading 2361. So that's good. August 21st versus September 11th. 115. Put just the bottom of that gap. That earnings gap. You can buy that for maybe it was trading about a dollar. It might be a little bit higher than this because we've traded down. But you know I have that modeling to nearly about, you know, if we if we hold this until the 20th of September, looking at somewhere between 1.9 and 2 to one. All right. So as we look at the technicals on this one, are you seeing the potential that we could perhaps head down toward that 115 level. Sure. So to highlight some of the levels that were being discussed here, 115 is our green line. That's a level I had marked because it represented a notable high point. And then it was the opening of the gap that Mike was describing for earnings. So also I highlighted 124 here, which was the low point that we initially reached after the gap to the upside below, which we are starting to move today. So these two yellow lines would kind of, you know, highlight some of those areas we've been discussing. So relative highs recently. 132 that's where we hit our high water mark after earnings here. 148 also stands out here. High point and high point here. That has really not been tested for quite some time. The general trajectory shows that it is accelerating to the upside. We had our old trend line here in blue which has now given way to our steeper, sharper trend line here. Earnings rewrites the situation somewhat here, but these areas still stand out, stand out as potential areas of support to watch out for going forward. So next we can think about our moving averages. And in this case here our five day EMA in dark blue is where we are seeming to come close to testing right now. 12255 is where that one comes in. We are a bit above that, about a dollar above that area right now. So that could be one area to watch out for. If we do deteriorate a little bit more. Below that, we also have a confluence. We have our 21 day EMA representing one month of trading activity. We also have it lining up very closely with our 251 day EMA representing one year, 251 trading days in a year. So our teal and orange lines right on top of each other near about 112113 or so, gives us another notable supportive area to watch out for. RSI has also been interrupted. Here we can see that we are in additionally, to no longer being in the overbought area, we've had a bearish crossover below that threshold of 70. We also seem to be moving below our shorter term green trend line here as well. So a bit more information in the bearish column right now in terms of our technical studies. Now we can see that our volume profile study shows we have a node here between about 102 to 113 as well as here 120 to about 135 or so. Those are the standout areas close to our current price activity. Things are a little more slight above where we are now, but there is another smaller node near about 145 or so. All right. And right now we are at 12355 down about 3.5% for sea limited on the day, also almost about the same down year to date. But if we look more broadly over the last 52 weeks, we're still down closer to 30% for sea. Now your next one is Zillow. We're in real estate here. So obviously, overall, the entire industry has been under some pressure. But Zillow did have good earnings, has had some momentum on its side over the last month. So how are you looking at Zillow, Mike? Yeah, so going with my theme of balance here, I got something for everybody today, Zillow. You know, it's just not going anywhere. And so and until we start to see any sort of green shoots or anything coming up, you know, as far as the housing market goes, I don't think that this changes. So I'm looking at a at an iron condor that we just sit and stay. Implied volatility is a little bit north of that 50 line. So it's more it's least it's lower. It's it's lower 55% of the time over the last 52 weeks. So I am looking at an iron condor. This is for regular Sep 921. This is the 2530 37 half 42. You should be able to sell that for about $1.50. And you know, just in this this low environment and with really no, no no the good the good earnings are helping hold it up. And the bad market is pushing it down. And so I intend for that to continue. All right. So as we look at Zillow and the technicals here, what are you seeing in terms of the levels that stuck out to you. So some of those levels that stood out are Breakevens were around 29 and 39 or so. So 2923 was our 52 week low here. That was our, our green line here. Then 39 up here was a series of low points and then a subsequent high point as well. So that would be kind of the range in this trade here. And to be sure, a pronounced sideways drift is what has taken place recently. Some other horizontal levels that traders may be interested in. We had a gap here near around 36. We also had a short term ceiling here near around 37. So those areas also stick out. Our general price trend lines here show that we had a very, very slight trend line pointing upward along our lows. A longer term one you could draw going along these highs here that we saw. So sort of a triangular shape here suggesting lowering volatility, which often can be the precursor to higher volatility when you do get an eventual breakout beyond either of these established boundaries here. So our moving averages are mostly clustered together in this case matching our idea of lowered volatility here. So around 33 to 35 or so is where our five day, 21 day and 63 day EMAs come in our RSI study. Our measure of momentum. We are a bit above the 50 mid line here, but we took something of a hit after earnings just modestly above that mid line that separates bearish and bullish momentum. So look for RSI to make a matching breakout in tandem with price for further directional bias. So in this case our volume profile has very clear nodes that are close to where we are now. One matches up with our Rangebound area that we established recently between about 31 to 36. The other matches up with our prior rangebound area that we saw here between about 42 to 47. So just kind of in general, Zillow exhibits this stairstep type of price activity we see of consolidative periods, followed by large breaks, and then another consolidative period, a large break, and then a range bound area again. So this, this is a pattern that very shows up very commonly in stock trading. All right. And right now as we look at Zillow, it is up 3.7% today, trading around 34.49. But under pressure both as you look at any of the six month chart, the year to date or the full year, this last one is Vertiv, which has had some very nice growth as I'm looking up about 80% year to date. Little bit of pressure over the last month. How are you looking at Vertiv right now? Mike? Yeah, exactly. So you know, Vertiv is let's just call it, you know, a AI infrastructure for, for lack of a better term. And, you know, this is, you know, glomming on to the AI trade that I'm not giving up on, but this is trailing behind it. And so I like the, the potential here. Now we do have to do a little bit of work on this one, because I want to give above that 50 day moving average. That said, I just round number 299. And what I'm looking at is August 28th, the 3233335 broken wing call fly. We can buy that for about 140. If we get up above 299, maximum reward is $8.16 there. So you're looking at 6.14 to 1 for your reward to risk. All right. So as we look at this with Vertiv here and that trade, what is standing out to you here in the technicals. Rick. I see we had a downward sloping channel. But it seems that now we have a converging line right. So 3233335 I don't quite have those exact areas highlighted here, but 315 is the one that stuck out to me based on it being a relative high point here. And then also 338 was a repeated ceiling. So kind of these are the some of the general points that would be in the directional bias of this particular trade that was just discussed here. So we also can see a recent high became a new low a low point here. So the resistance became support around 286. Repeated highs here became the low points again multiple times near 275. So this one stands out even more prominently. Finally a gap here. 264 which never quite got filled. It was not the largest gap, but it was one that that remains kind of a question mark here in terms of price activity filling the void that was established there. So now our moving averages are a bit of a mixed picture once again here, because we have our faster five day EMA below two of our slower moving counterparts, but starting to cross above them. Here we can see the five day crossing above the 21 day. Meanwhile, our 63 day in gold remains at 292. That is the level above which we are trying to seemingly overtake today, which also corresponds with our downward sloping white line here. So our channel and our our quarterly 63 day EMA and gold line up on top of each other. So that would be a notable breakout as well if we were to push to the upside. Beyond that boundary, RSI shows that we are starting to cross above the 50 mid line as well. So momentum is starting to improve. Here we are having that shift above the 50 mid-line and above the trend line concurrently. So if we were to couple that with a breakout, that would be a rather interesting bullish development here. So now volume profile shows one node here 253 to 275 and one here 300 to 330 or so. Those are the the kind of bookends here that would be presented for heavy trading activity consolidation zones potentially here to the upside and the downside. All right. As we look at Vertiv right now we are up more than 1% on the session right now at 29189. Mike, really appreciate you being with us today for big Three and for bringing