The Big 3: IONQ, AKAM, STM

Welcome back to Trading 360. I'm Marley Kaden. It's time for the big three. We've got three stocks, three charts, and [music] three trades for you. Rick Dat will take us through the charts. Here to take us through the trades today is Mike Shore, director of trading education at Prosper Trading Academy. Great to have you both with us. Mike, I wish your dog had stayed with us. I saw in the break you were petting your dog. [laughter] >> I know. I know. I know. She is uh she's persistent. Well, she's always she's always welcome anytime she wants to join, but why don't we kick things off with how you're looking at trading so far this week. We've got quite a bit of macro data coming our way. We got a little bit yesterday. What are you seeing right now? >> Yeah, I I I think that we are kind of in a holding pattern. You know, we got jolts today. Market didn't react to it, but we do have PC and unemployment and a slew of other things and a lot of Fed speak. It just kind of seems to be the lull behind the storm right now. All right, so let's dive into the big three then and see where they fit in the lull ahead of a potential storm. You've got ION Q as your first pick in the big three today. Uh they drew some fresh attention when B of A gave them the buy rating and a $60 price target. Right now they're about 4440. So how are you looking at Ion Q? >> So uh you know I I like the fact that it's gotten above and it's stayed above the 200 day moving average. And so I was looking for that continuation just slightly above its 100 day. And then I was actually uh I'm looking at at the uh the the 5560 call spread. >> All right, Rick. So as we look across here and he's looking at a 5560 call spread here. We don't have the earnings until early November. So that's not a risk here uh in this trade. What are you seeing in the technical setup here? Yeah. So, what we've seen recently has been that we uh after hitting our 52- week lows of 25.89 in late [clears throat] March, we had a strong rally following earnings and really before earnings too from uh April and then a a moderation of that trend. If we could pull up our chart, we could see that we uh hit a low point here near uh 35 recently. We also uh did not quite fill a small gap that was formed 3181 at the start of our climb to the upside here. But from there, we formed higher lows. So, our blue trend line not really as important anymore here because we have our white trend line in play which is a much steeper and sharper slope to the upside. So, then also above that we could see 54.84 was another notable high uh as well. So to think about our moving averages next, we are starting to see some improvement. They were all clustered together in a relatively close distance. Now they come in between about 41 to 44. Our 5-day and our 251day exponential moving averages are pretty much right on top of each other uh around 43 44 or so. So that's our longest term representing one year and our shortest term representing one week that also line up roughly with our trend line in white. So this gives us an easy point to watch out for uh potential support if you're bullish or a breakdown if you're bearish. Meanwhile, RSI, our measure of momentum, shows that we have uh crossed above a 50 the 50 midline uh a few weeks ago. Here we are in danger of breaking our shorterterm green trend line but for now we remain in the bullish territory. Volume profile shows that our node in question that is largest is between about 40 to 50. Our point of control comes in at 4581. So that's the heaviest trading volume area of all. It would be notable if we were able to cross above this area. Notice as well too recent volume spikes that we saw uh in our uh volume uh uh bars at the bottom of the screen there suggesting heavy activity recently in this name. >> All right, Mike. So take us through uh some more details in this call spread here and how you'd play eye on Q in the short term. >> So I'm just using uh regular October. So that's October 16th. I think I misspoke before. the 4550 call spread. If we can buy that for 115, max lost 115, max potential return 385, and you're getting 3.35 to one on that. >> All right, so then let's dive into your second pick here. You've got AAI technologies as we're looking across Aami. They have this 11.6 billion anthropic cloud deal. We saw a nice move off of that. But how are you looking at Okami going forward, Mike? Are you optimistic here? >> I I I'm um I'm I'm nothingistic is in in this one. So, uh I I should uh disclose that we did put out a signal in this. Uh I have not gotten filled yet, but um pretty darn close. Just to put that out there. So, you know, what we did is we had this pullback to the 200 day moving average and and and in looking at it, it tends to stick around there for a little bit, especially if the market isn't doing much. And so, I'm looking at a sit and stay type of trade with a credit iron condor. The uh this is for just for Friday, October 2nd, uh 103, 106, 113, 116 iron condor. If we can sell that for$1 190 now, we can take in 190 in premium. It's $3 wide on each side. So $3 minus the 190, I'm risking a$110. So we need to sit and stay, but I'm only laying 0.58 to1 odds. >> All right. So looking for a sit and stay neutral here. Uh Rick, what are you seeing in the technical setup for AAI? We are trading about 1.7% lower today. >> Right. So we had this big news that came recently. We had a very sharp push to the upside, but our overall price pattern you could see was a downward sloping channel type shape. We did have that one uh anomalous push to the upside. Now the news seems to have died down a little bit and we have fallen back below the 110 level which was a series of repeated lows. It has since been breached but I kept it on the chart just as a reference. Our next set of relative lows comes in at 101. our our middle green line there. Beyond that, 94 would be a notable downside area to watch out for as well. So, our channel is in play right now. Um, often times you you can see after a big piece of news, there'll be a pullback to a prior support level before the trend continues in its in its uh previous direction here. Certainly not saying that's going to happen, just saying that's something that you can see rather rather commonly in trading. So, the 125 level stands out. That was those old highs. That's around where we opened up on the day of our big news which was uh you know three sessions ago, four sessions ago at this point. Then 130 our next set of relative highs beyond that 138. >> So next we can see that our moving averages that we follow we have started to slip below the 251day exponential moving average. Our long-term yearly EMA there in orange that comes in at 108. So we can see now that we have uh fallen below them all in rapid succession here. We are below our 50 midline on the RSI. We are still seeing a green longerterm upward trend line in play but our shorter term red downward trend line is also in play here. So more of a negative tilt at this point but kind of modestly. Our volume profile study shows that we are within the midst of a heavy trading area 108 to 118. But also look, you can see that very large volume spike on the day of our our news that we had last week here. So that was a again a very standout day for this stock. >> All right. And as we look today, we're at 10745 for AAI here. Again, down about a percent and a half. Uh your last one, Mike, I have to be honest, I haven't talked much about uh ticker STM, ST, micro electronics. So, walk me through what you're seeing with STM. >> Yeah, you and um you know, this just for the last few days, this is popped up on my scanners. I'll be honest, I I'm not, you know, super familiar with it. I or something that I trade a lot, but it it definitely I like I like the setup here. We've we've come up to resistance at the 50-day moving average. I use simple moving averages on my longer term charts. Um and and we've gotten above that and now we're holding it. So now I'm looking for that secondary move. So above 5355, which I believe we got above that. Yeah, we got above that this morning. Uh we've pulled back from that. So we still have a shot at that. So up above that, then we're going to be targeting the uh the 59 strike. >> All right. >> Regular October. So, the 59 strike for October here for STM in this call vertical. Uh, and Rick, as you're looking here, is 59 a level that's standing out to you? Well, um, I had 57 more specifically highlighted. And the reason why is that after we had our earnings gap down on July 23rd, that was the high point that we established shortly after that. That was then after our pullback. You can see our our red line was that 57 level. Then 48, our green line, the low point after the previous earnings gap to the upside back in April. So we established a range. Then we held on to that previous low multiple times near 48. We have not yet breached that 57 level despite testing it uh several times in early August. So one thing I will say though is our blue trend line that's in play. uh rather it was in play after before today. We seem to have pushed above it. Right now our white upward sloping trend line is now uh seeming to be more of the dominant trend if this move to the upside does hold. Notice as well 65 is roughly where our last gap opened up. Another relative high comes in at 76 to the downside. 48 to 45 is the uh previous earnings gap that I mentioned. another gap uh just before that uh began at 42. So next we can see that our 63-day EMA representing one quarter in gold is the most relevant one for for today's trading activity. It comes in at 5415. That's about where we topped out today and have seen a bit of a pullback. We could also notice that our 5-day EMA and our 21-day EMA representing a week and a month of trading activity uh coincide pretty closely to each other around 5150 to 52 or so. They also line up with our trend line. So, this gives us a potential breakdown point to watch out for as well. RSI, our measure of momentum trending upward. We are above the 50 midline. We have not really quite made new relative highs though above our previous peak. So that would be something that the bulls would want to see in order to uh get some uh clarity about the prospects of a continued uptrend. So finally volume profile in this case 49 to 54 is the relevant area in which we find ourselves. Things start to thin out pretty dramatically once you start getting above 57 or so. So you could see fastmoving prices in that area. 69 to 72 is the next node that we have to the upside. and Mike 57's right in the middle of of your call vertical here. So you take me through what other strike you're looking at here and what are max risk and max reward are. >> So typically, you know, I I I look at the chart and then probably more importantly, I look at the implied volatility and then from that I can get a I I can get an expected move from that. And so that that lined up with a one standard deviation move right up to the 59 strike. And so, you know, I I I I see what Rick was saying about the 57s. I think we get through that if we get this ball rolling. And so, that's why I went with the 569. >> All right. So, 569 here again with the October expiration there on October 16th. They don't have their earnings till the 29th. So, earning no earnings event risk here with ST Micro Electronics, which is up a half a percent on the session. Mike, really appreciate you being with us for big three today. Mike Shore and of course Rick Dant, our lead market technician for breaking down the technicals for us.