September started with a thud, and it’s the same story that’s been dogging this market for a week: renewed U.S.-Iran hostilities in the Strait of Hormuz, crude and bond yields both surging, and tech stocks taking the brunt of the selling.  The Nasdaq is down over 1%, and it’s tempting to sit on my hands until the headlines settle down.

But pullbacks like this are exactly when I want the Stock Forecast Toolbox working the hardest for me.  Try it out for free!  When the broad market is nervous, I’m looking for the names that hold up best, or better yet, the ones that are still projected to run even with a tech-led selloff dragging on the tape.  Today, that name is Palantir (PLTR):

The stock has been resilient even as chip names and megacap tech get hit, and that relative strength tells me institutional money isn’t in a hurry to leave.  So I went straight to the Toolbox to see if the AI model agreed with what my eyes were telling me:

The model is projecting a run toward $200 over the coming 2 weeks, and that’s the kind of target that gets my attention on a day like today, when most of the market is red.  It doesn’t mean PLTR is immune to further weakness if the Iran headlines get worse, but the projection gives me the confidence to structure a defined-risk trade around that target rather than just buying the stock outright and hoping.

That’s where the October 16th $180/$200 call debit spread comes in.  It’s currently priced at about $7.20, with a maximum value of $20.00 if PLTR closes above $200 at expiration.  I’m not counting on the max payout, and I don’t need it to make this trade worthwhile.  If PLTR makes a real move toward that $200 target in the next several weeks, this spread should be able to double, and realistically, that’s the outcome I’m playing for rather than squeezing out every last dollar into expiration.  A 100%+ return on a defined-risk options structure, in a market that’s otherwise struggling to find its footing, is exactly the kind of asymmetric setup I want to be involved in.

As a reminder, the Forecast Toolbox doesn’t just give me one prediction every week or every day.  It models out high probability moves for most listed stocks in the market. I can check every stock in my portfolio to make sure I’m positioned right when I’m holding my investments, and when I’m looking for a new trade, it provides a filtered list of some of the most explosive setups so I can find the next great idea for my trading portfolio.

Make sure to take advantage of the free 7-Day Trial of the Stock Forecast Toolbox so you can see what it can do for you!

If you have any questions, never hesitate to reach out.

Keith Harwood

Keith@OptionHotline.com