4/27 Best Idea For The Week Ahead

Before we get into the trade idea today, let’s look at where the market closed yesterday. It has been 16 sessions since we put in that bearish engulfing candle that began our reversal. This week we got 3 really strong prints from META,GOOG, and MSFT. Even though META didn’t have the strong reaction, that was due to other factors, their numbers were spectacular. This market looks like it wants to go higher, it’s hard to say anything until there is some sort of confirmation and that would be when the short term 8 ema crosses over the 21 ema, but that could very well happen next week. The megacaps to this point have been saviors as usual with Amazon, Apple, and Eli Lilly reporting this week, Nvidia is in mid May. I know it never gets mentioned with the group but Lilly has a $700B market cap, its a megacap to me.

Here is the earnings calendar for this week

On another note, I’m not really sure what happened yesterday but inside the Bloomberg it was showing an Amazon dividend schedule yesterday for the next 8 years afterhours. Was this a leak? Was it an error? Is Amazon dropping a dividend this Tuesday? If so I’d be a tad disappointed but it wouldn’t shock me that they’d try to appease the market after the reactions META and GOOG had to dividends. There is also the small matter of Jeff Bezos holding 900m+ shares and likely wanting a few bucks to pay bills every quarter without selling stock as he just did.

This weeks best idea is not my usual style, it is a smaller name but it has seen alot of activity relatively speaking this month and it has been mentioned as a prime buyout candidate for a while so I’ll go over some trade ideas after looking at some charts, price targets, and option flow. I have a good structure for a trade where you can get paid even if the buyout doesn’t materialize.