Hey, Ross here:
With markets falling after the Fed’s rate hike yesterday, it’s time to look at a short trade idea instead.
Chart of the Day
Earlier this month, CareDX Inc. (CDNA) got absolutely crushed.
The stock fell 32% in a single session after a Medicare policy change appeared to indicate it would no longer cover services for the organ transplant test maker.
The selloff was not only the sharpest intraday loss for CDNA since 2015 – it also occurred on 12 times its average daily volume.
The market has had two weeks to sort out the news and determine if the news is as bad as originally perceived.
It appears that it was. The stock has been unable to rally and is now flirting with making a new 5-year low.
CDNA has now broken below the $9.00 mark. I would consider selling it short with a buy stop at $10.00.
P.S. Want me to send you special trade prospects and potential market moves directly to your phone? Text the word ross to 74121.
Insight of the Day
The best traders are natural “flip-floppers”.
People hate flip-flopping politicians. And even in our daily lives, we hate changing our views and positions.
But if you want to be a good trader, you have to be a natural “flip-flopper”.
Case in point – the market’s reaction to the Fed’s middle-of-the-road 25-point hike yesterday. Depending on what Powell said in the press conference, the ultimate reaction really could have gone either way.
Will the Fed U-turn anytime soon? Maybe, maybe not.
Good traders don’t have firm opinions on where the market “should” go – we just react accordingly. If conditions are better to go long, we go long. And if conditions are better to go short, we go short.
Keep reading this newsletter to get actionable trade ideas that match whatever the current market environment is.
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Embrace the surge,
Editor, Stock Surge Daily