A month ago we looked at what seemed like a long shot. Medical device manufacturer Insulet (PODD) looked a little inflated and the long shot was to buy a put option and be ready for the drop. A week later we checked in and we hadn’t seen the trigger manifest on the chart. We were looking for a confirmation of a close below the 10 day moving average. Just to make us crazy, PODD hung there like Wiley Coyote dangling off a cliff.

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So how long do you wait for the signal? It can be very tempting to move in too quick thinking you are getting an even better deal, but sticking to your rules is a must.

We have finally seen that confirmation below the 10 day we were looking for and although we haven’t seen the strong bearish MACD crossover we have seen it move back toward 0.

The May puts we looked at a few weeks ago don’t give us enough time so we have to move them out to June. The 280 strike for June is about $6.50 and that would be a likely choice.

When we said longshot we were thinking more about big potential upside. We didn’t realize it was more relevant to the long time it took to truly set up.

We’ll keep an eye on this one and circle back.

Keep learning and trade wisely,

John Boyer


Market Wealth Daily