Hey 5-Star Trader,
Every week is a new and unique experience in the market. This is because market behavior can shift on a dime and tickers can fluctuate greatly from day to day. That is why I find it important to sit down and write my watchlist so I can keep track of my prospects.
The first thing I do is create different “buckets” of tickers. Normally, my buckets can be boiled down to two types: options tickers and stock picks. However, because we are in the middle of earnings season I’ve added a third category for earnings plays.
Now that I have my three buckets, I’m ready to dive into the markets.
For my options bucket, I consider the macros and any relevant news, especially anything unexpected. Media outlets have a huge influence on the health of a ticker. For example, this week Tesla (TSLA) was overrun with media coverage and the stock is up. So, I’ll put TSLA on my list. Below are a few others that caught my eye:
- GameStop (GME), John Deere (DE), Sea (SE), and Adobe (ADBE)
For my stocks bucket, I like to focus on tickers that I think might be a strong ticker overall, but are currently underperforming or on a pullback. This way I can get my entries in at a discount. Some names that I found include:
- Upwork (UPWK), Crowdstrike (CRWD), Disney (DIS), and Facebook (FB)
For my earnings bucket, I take a look at which companies are reporting soon. My main focus in this category is to find businesses that are either reporting in 21 days (the “run into earnings”) or just a few days before releasing the quarterly report (trading the actual report). Some of the names that made it this week include:
- Etsy (ETSY), Roku (ROKU), Cloudfare (NET), and First Solar (FSLR)
With countless tickers to choose from these three buckets, it would be impossible to buy contracts for all of the potential choices. And furthermore, you wouldn’t want to — this could overwhelm your trading plan and place too much risk against your account.
It is important to dedicate time to constantly evaluate which opportunity you should be setting up for next.
Interested in more commentary? Follow me on Twitter, where I often post my watchlists for free!