A week ago, we spotted a move that ended up taking off. Insulet (PODD), a medical device company that makes insulin delivery pumps, gave us some telltale signs that it was about to rally. When we looked at it last week, it was at $258. (check out the article here.) It got up as high as as $320 in just a couple days. Let’s look at the three clues we spotted.
The first thing that caught our attention is that PODD had crossed above all of its moving averages. This is a sign of strong momentum and tells us the move has the power to keep going. The other sign was that the MACD had recently crossed over. That alerts us to a potential reversal and is a heads up to look at possible ways to trade this move.
The last sign we spotted was the one that let us know it had plenty of room to run. After the MACD crossed it was still in the oversold territory. This means it doesn’t have a lot if buyers in it yet that are looking for a quick exit.
Sure enough, it took off a couple days later and shot up about 50 points. That is a quick 20% grab just in the stock. We had targeted the 280 previous high as a price target and mentioned it would be a great environment to consider a call option. The 280 December calls were at about $10 then. After the jump they shot up to over $30.
Don Fishback has laid out some of the best options strategies for trades like this in his quick start guide. You can grab it here.
Keep learning and trade wisely,
John Boyer
Editor
Market Wealth Daily
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