Trade Alert: A Biotech Binary And An Earnings Short
A bullish Phase 3 bet and a bearish earnings trade in an AI market leader.
While We Wait For The AI Trade To Shake Out
Many U.S.-listed AI leaders are still being punished even as the companies supplying power, testing, storage, and memory report record results. The fundamental evidence and the price action are sending different signals, as we noted in our post earlier this morning.
None of the names we monitor passed either AI recovery screen last night. We’re keeping our entry bar high and preserving dry powder until the screens begin to confirm the turn. We do have on bullish and one bearish for today though.
A Bullish Biotech Trade…
Today’s bullish trade is a defined-risk bet on a biotech with Phase 3 data due in August, sourced from one of our Multibaggers accounts (as regular readers know, our Multibaggers are a subset of traders from our Market Watchers X list who have multiple, documented 100%+ recent winners). Its structure preserves uncapped upside while capping the downside if the trial fails.
…And A Bearish Software Trade
Today’s bearish trade came from our Bearish Rally Failure Screen. It’s an earnings-window structure on a richly valued software leader whose chart remains vulnerable.
The two trades call for different payoff shapes. The biotech position pays for discontinuous upside. The bearish position uses elevated event volatility and a short-dated put leg to reduce the cost of downside exposure through next week’s report.
Full details on both trades, including the underlying securities, exact structures, maximum entry prices, and pre-set exit plans below.
Today’s Multibaggers Trade
Cardiopulmonary biotech / Phase 3 binary theme
RSI: 56; Chartmill Technical Rating: 10; Setup Rating: 5; Fundamental Rating: 3.
