Before I get into some interesting trade ideas, I wanted to give you the opportunity to sign up for an exclusive free webinar this afternoon, December 11th, at 1:00 PM ET.  I hope you can all make it to learn more about the AI system I’m using to evaluate options trading opportunities!

The market seems ready to take a brief pause from the general bullish flow.  This should not be considered a surprise, as we do often see minor pullbacks within a bullish trend, but if the market continues downside due to fundamental inputs, it can be a cause for alarm.  For now, that means that I need to have high conviction and strength of analysis to be convinced that the time to buy is right now, and I’m certainly seeing some names that fit that model.

Let’s start by reviewing last week’s highlighted AI-generated options selection, Altria Group (MO):

A few key notes here come to mind.  First, we had a dip on Wednesday morning, but nicely positive performance in the stock from Tuesday through Friday, which is great to see for the bull.  The dip on Wednesday was certainly alleviated with the defined risk of options, and seeing the re-test of highs during the day on Friday made for some intriguing potential for further bullishness.  But, rejecting the highs, finding resistance, and most importantly, the AI system rules dictating that I exit on Friday meant that I shouldn’t hold onto the bullish position over the weekend.  That means that rather than experiencing Monday’s drawdown, the trading system was out for a profit.  That’s huge!  The difference in exiting the January 17th $55 calls on Friday vs. exiting on Monday?  From Tuesday’s entry, Friday’s exit was a 14% profit in just 72 hours, while holding until the close on Monday would have generated a 38% loss.  And that’s why it’s important to have rules that maximize the potential for the best returns that compound over time.

All that said, that trade is now in the past, and it’s time to once again look for new opportunities that are lining up right now.  So, I’m going back to the AI system for a trade that looks very intriguing!  Today, I want to highlight one of our new signals, and that’s in Williams Companies (WMB):

Now, seeing the 3 big red bars could be cause for concern.  But dig a little bit deeper and we can see that this pullback has a very identifiable trend – large selling on Monday and bounce back through Friday.  The Monday selling has happened 3 weeks in a row, and when a stock has the risk of a further liquidation, I want defined risk via call options.  If this is the end of the risk-off investment flow, there’s significant opportunity to the upside.  If it’s going to continue, the trend has been on Monday, and while that may change, I have much greater confidence in buying in today and exiting on Friday, per my rules, than I would on holding through Monday next week.

If you want to learn more about utilizing AI for predicting dynamic markets, join me this afternoon where we will discuss the incredible opportunities that can be captured utilizing state-of-the-art technological advancements in trade recognition.  We’ll be live at 1PM ET, so sign up now!  I’ll be presenting with Vlad Karpel, the brains behind the AI system that has had proven success in predicting these dynamic markets!

As always, please go to http://optionhotline.com to review how I traditionally apply technical signals, volatility analysis, and probability analysis to my options trades.  And if you have any questions, never hesitate to reach out.

Keith Harwood

Keith@OptionHotline.com