Last week, the PPO (Percentage Price Oscillator) on the Nasdaq 60-minute chart made a bullish crossover, with the PPO line moving up through the signal line while the histogram flipped from negative to positive. This shift signaled that downside momentum was fading and short-term upside momentum was beginning to build.

That crossover occurred after a sharp pullback, which often creates the conditions for a tradable bounce as sellers become exhausted and buyers step back in. With momentum turning and price beginning to stabilize and push higher, this met our criteria for a tactical bullish entry.

As a result, we opened a new options position in QQQ today to participate in the expected short-term upside move, while risk remains defined through the structure of the option trade.

Risk Note: If momentum rolls back over and the PPO makes a bearish recross while price loses recent support, we will reassess quickly, as that would signal the bounce thesis is failing.

Possible trade: If we bought the 2-27 QQQ 622 calls for $7.71 and the stock price went up $5, we would make about $2.50, a 34% profit.

I wish you the very best,

Wendy

  P.S.—If you want me to just shoot you a text or an email when I spot a trade like this, you are going to want to take a look at this.