• Sat. May 18th, 2024

Catching The Drop in This Dog Meat Stock!!!!

ByJeff Bishop

Jul 28, 2022
Catching The Drop in This Dog Meat Stock!!!!


After catching the bounce in the QQQ’s which you can read about here, there was one stock I got bearish on. I discussed this trade LIVE on Monday’s training in the new Wall St 360 chat room, which is currently available at NO COST. Sign Up Here! Here’s what happened:

The Put option that I bought exploded over 70% in under 2 days, and I went over the Idea LIVE in Wall St 360. Here’s the tentative schedule, Don’t miss the next trade Idea sign up HERE:

360 wall street schedule

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Chewy, Inc.,(CHWY) together with its subsidiaries, engages in the pure play e-commerce business in the United States. The company provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its www.chewy.com retail Website. 

It’s a literal DOG MEAT stock! LOL! I actually usually love this company and have traded it from the long side many times, but the technicals lined up in such a way that the trade setup was to short CHWY, in the short term. Here’s why!

CHWY chart

The 45.50 area had been an area of previous resistance over the last few weeks. CHWY failed to hold above that price on no less than 3 occasions. So when on Friday it traded above 45.50 to a high of 47.49 but then got rejected and closed at 42.52 I knew that longs were in trouble.

You see, that is a massive rejection and to me, a sign that bears were in control. This was the fourth occasion that CHWY failed to hold above 45.50 and the way the stock closed was very weak. Psychologically anyone who bought the break-out above 45.50 was now underwater, so when on Monday morning CHWY showed more weakness, I knew it was time to get short as longs were now in a world of pain, and I thought they would get shaken out.

So rather than naked shorting the stock, I decided to buy put options. I bought the $42 put options expiring August 19 for $3.40.

CHWY Listing

As expected, on Tuesday, the stock opened  lower and traded as low as 37.24.

CHWY chart

The puts I bought for $3.40 traded as high as $6. Over 70% in 2 days? Trades don’t often work much better than that, I went over it all live in the Wall St 360 chat. Available at NO COST for a limited time this Summer!

Take your trading preparation to the next level. Click here and join us live in 360 Wall st!

 We’ve also decided to give away daily high-conviction trade ideas for the rest of the Summer (maybe more!)

All you have to do to get this DAILY trade idea is download the RagingBull App.

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Image and article originally from ragingbull.com. Read the original article here.