7/13 Best Idea

Before I get into this weeks best idea I wanted to share this dynamic bar chart one of the discord members, Ehrenmat, sent me showing the YTD so far from my database in motion. This is the top 20 names on a weekly timeframe. You can see what names picked up steam as trends and when throughout the year. It’s a pretty neat visualization and if you’re interested in me sharing it more often just let me know

link

This week’s best idea is a $3B company that’s seen some hot call action in the past week and is still almost 80% off all time highs from 2021. At this moment, that’s the segment of the market that is working, small caps, it isn’t my favorite, but there are some names that are not junk, this is one. Actually the day of the first trade this week, a couple hours later a rumor emerged that it was a takeover name, I obviously am not shocked some call flow came hours before that, but these rumored takeovers sometimes do not work see HUBS this week. That of course was near highs when that fell apart, this is pretty much at lows, so either way I see it as a solid trade just with where we are in the market cycle today where small caps are the trade to be in.

Speaking of recent best ideas of rumored buyouts, JWN, has gone really well, I wrote that up as a weekend best idea back on 4/26 here. If you’re in that trade, the common is up 20%, I would suggest closing that trade out. Can Nordstrom’s get bought out, sure, but it is not a high quality name in any way and any time you catch a 20% move in 2 months on something like that, you take it and run. If you look at the chart below since, it is actually technically breaking out finally reclaiming the 200 week now but I’ve seen this so many times where the name gets beat back down on some headline.

That initial trade I drew up out in 2026 is up alot with those 12.50 short puts plunging and the calls at 20 rising 50% so far,

Anyways thats that, let’s get into this week’s best idea. I’m going to do what I’ve done recently and give you multiple ways to play it from conservative to aggressive. We’ll look at the charts, option flow, the rumored takeover, and of course as always, I have a plan to play it where we can still profit if the trade doesn’t work