$10M Says the Energy Sector Moves Higher by May…
The big money is all about energy this week…And I know exactly why they’re watching it. By May 10, all 22 companies in this sector will have reported their first quarter earnings — and the charts for each stock couldn’t be more bullish. It’s no wonder the big money laid out over $10 million betting on breakouts. And that was before the decline we saw on Friday… So if you want to follow any of these trades, you can get much better prices. Personally, I think these traders are right on the money. The stocks in this sector are set to make big moves by summer. And as the type of trader who values price action above all else, I can’t help but like these setups. Here’s exactly what the big money is trading…
Big Money’s Bullish on Energy
The Big Money was super bullish on the energy sector this week. If you’ve been following the news lately, that probably doesn’t surprise you much. But even without reading a single headline, I can see why these trades are hitting my scanner.One trader bought the Marathon Oil (MRO) July 15, 2022 $30 calls for $3.6 million. MRO reports earnings on May 4. Callon Petroleum Company (CPE) reports earnings the same day. This bullish trader put $3.5 million into the January 2023 $80 calls (26% out of the money at the time). Now, it wasn’t ALL bullish. There was one bearish bet among the fold, on Exxon Mobile (XOM). The company reports earnings on April 29, so this skeptical trader bought the January 2024 $105 puts for $2 million. That was it for individual stocks — but we also had a ton of action on the Energy Select Sector SPDR Fund (XLE). It’s made up of all 22 energy stocks in the S&P 500. Each one is either trading in a rising price channel, rising wedge pattern, or ascending triangle — all hugely bullish patterns.
These are just nine of the stocks in XLE, but they all have similar patterns. And this has carried over to the price chart of the energy sector as a whole:
For XLE, that green support line is the thing to watch this week.If it holds, our bullish traders today will be breathing a sigh of relief… If not… Well, hopefully they’re able to bail out before losing millions. There were two huge bets on XLE to speak of. One was $3 million on the May 20, 2022 $76.50 calls. The other was worth $1.73 million on the May 20, 2022 $74 calls. You know I don’t like to place bets ahead of earnings… But the price action doesn’t lie. A lot of energy stocks are showing rising wedge patterns, indicating a breakout could be coming any day now. That would carry the whole sector higher. If you’re going to follow the big money, now’s the week to do it — especially with the bargain prices we’re seeing right now. That’s all for today. I’ll be back next Monday with more big money trades.
Regards,Chad Shoop, CMT Editor, Quick Hit Profits
Chart of the Day:Everything but Bitcoin
By Mike Merson, Managing Editor, True Options Masters
To kick off the week, I want to look at the crypto market… just, not in the typical way.a coin that effectively represents most of the altcoin market. And he says that buying it now is your next best chance at crypto riches. I’m in firm agreement with Ian here. I’ve held the coin he’s talking about since 2016. Maybe I’m biased, but I think it goes to show how confident I am in this trade. I have zero doubt that the real alpha in crypto investing is in these altcoins. The altcoin market cap is currently retesting the 2020 breakout. I believe that will lead to another parabolic run like we saw in 2017, which will take folks by surprise. You don’t have to be one of them. Click here to learn more.In this chart, I’m comparing the total crypto market cap excluding bitcoin (the green and red monthly candles), to bitcoin itself (the orange line). You can see that the non-bitcoin part of the crypto market (often called “altcoins”) quickly caught up to bitcoin in 2017. They lagged somewhat in the bear market that followed, but have since surpassed bitcoin in market cap. If we were to look at the difference in percentage gains, we’d see that altcoins have returned an incredible 134,482% since inception, compared to bitcoin’s relatively modest 4,609%. Now, why bother looking at all this? Because one crypto expert by the name of Ian King is recommending
Mike Merson Managing Editor, True Options Masters
Investing has consumed my life since college. While double majoring in finance and economics at the University of North Carolina at Greensboro, I founded the university’s economics club, joined the finance club and participated in the Chartered Financial Analyst research competition to represent our school.