CleanSpark, Inc. (CLSK) appeared on our list of compressed stocks this morning. CLSK is a bitcoin mining company that has only been on our compressed stock list one time in the past. You can see looking at the ODDS Probability Cones in the chart below, that the one past signal turned out pretty good.

You can also see that the current stock price is very compressed. Compression signals occur when a stock price starts trading in an unusually narrow range. It’s like a compressed spring. The tighter that spring is compressed, the greater the tension in the spring. When the tension gets released, we get a big move in the stock price. We just need a catalyst to trigger the release of the tension. Triggers tend to occur within a few weeks after a compression signal. One potential catalyst that could trigger a big move in the next few weeks is an earnings report scheduled for August 7th.

This Volatility Cone shows us that the volatility expectations (the yellow dots) are mostly at or above the 1-year historical volatility average. To learn more about the Volatility Cone, click here. The one exception is the 1-month volatility expectations. That term is highlighted in the chart below. It is the only term below the historical average and that is good for our option buying strategies. That’s because the compression signal typically precedes a big move within a few weeks after the signal.

This Volatility Term Structure shows us the implied volatility of the at-the-money options for each expiration term. To learn more about Volatility Term Structure, click here. The one term from the previous page that had volatility expectations below the 1-year historical average was the 1-month term. That puts us into August. By going to the August 16th expiration, we get the best liquidity for our option buying strategies.

CLSK’s share price is compressed. The stock rarely gets compressed. CLSK has had only one compression signal in the past. That signal turned out pretty good, but that is not a huge sample size. The good news is that CLSK’s stock price typically moves big enough to stay off of the compressed stock list. More good news is that CLSK has an earnings report coming up before the August 16th expiration. That report could be an event that triggers the compressed stock to release its tension and make a big move.  

To get the details on today’s trade, be sure to read today’s ODDS Online Daily Option Trade Idea.

NOTE: The market will close early today at 1:00 pm ET. Tomorrow the market is closed for the Independence Day Holiday.  We expect liquidity to be terrible on Friday so we will not have a newsletter this Friday. We will be back to normal operations on Monday, July 8th. Have a great holiday weekend! 

To access Odds Online Daily and be able to see any stock you are tracking in this software, click here.

Thank you,

Don Fishback