Home » A Low Risk Trade for a High Risk Market

A Low Risk Trade for a High Risk Market

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The market action is ugly this week.

But that doesn’t mean that every stock is going down.

When a stock shows strength in a bearish market, that’s a very good sign.

If the indexes are down, but your stock is up…

There’s a good chance it will outpace the market further once things turn around.

Case in point: Horizon Therapeutics PLC (HZNP), the Illinois-based biopharmaceutical company.

Horizon is Setting Up for Another Surge

HZNP first hit our Watchlist back in July, and I told you I was buying this stock.

At the time, volatility was decreasing, and pullbacks were becoming shallower – a sign that less supply was coming to market.

It took off immediately, and the trade never went against me.

I’ve been updating you on the stock’s action here and here along the way.

Daily Chart of Horizon Therapeutics PLC (HZNP) with Initial Breakout — Source: TradingView

Here’s what it looked like on a five-minute chart:

Five-Minute Chart of Horizon Therapeutics PLC (HZNP) with Trades — Source: TradingView

Fast forward to today…

Despite the indexes selling off and many stocks turning negative for the week, HZNP has held up well.

In fact, it is setting up again in an even tighter pattern.

Traders can buy the next breakout by risking just 3.9% on the trade.

Daily Chart of Horizon Therapeutics PLC (HZNP) with Original Entry & Consolidations — Source: TradingView

I would consider buying HZNP if it gets above $111.36 – especially if we see a surge in volume.

Traders can work a tight stop beneath Tuesday’s low at $107.00.

For traders that want to play it with options instead, the HZNP November 19th, 2021, $120 strike call options were trading for about $3.00 as of this writing.

You’ll want to use the stock price as your entry and exit trigger.

If it works out, an 8%-10% move up in HZNP should result in roughly a 100% gain on the option.

But remember…

When markets are shaky, don’t hesitate to take some profits and lock in a gain if you have one

Embrace the Surge,

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Whats in the Article