The ramp writes itself

Elon Musk and a bet on flow.

The ramp writes itself

When Elon Musk gets involved in a stock - you take notice.

OK, not Elon Musk personally. But SpaceX - a company he controls and owns.

That was the case with early stage 2 stock Filtronic (FTC) this morning.

And the ramp writes itself!

Not only that, there was an earnings RNS saying that EBITDA would be “significantly ahead” of FY24 and for FY25 too. A multi-year profit upgrade.

And the chart doesn’t seem to have been expecting it.

So what we had was:

  • Stock breaking out of a shallow base

  • Price fell in the days into the announcement (so no leak)

  • Multi-year upgrades

  • Elon Musk ramp

This was a clear buy on the bell trade, a classic Opening Drive, gap-and-go, whatever you want to call it.

I think this trends higher and given that it’s an early stage 2 stock there could be a big trend yet.

Big Round Numbers

I’ve written about Big Round Numbers a lot.

They exist.

That’s despite the old efficient market hypothesis hogwash.

You should already know I like to sell before resistance (why let people sell before me and miss my chance?) and buy beneath support.

And that’s my logic for taking a scalp short on Warpaint (W7L).

It’s been a cracking move from 200p (and a hat tip to my broker Rob Goodall who called it yet I missed it).

A few weeks ago we had a trading update (arrow marked) and a big rally into these results.

So here we’ve got:

  • Rally into news that isn’t a surprise

  • Big move from 390p with lots of people in quick profits

  • Big Round Number of 500p as resistance for profit takers?

Hence why I’ve opened a scalp short and will close if it pushes through 500p.

To be clear, I have no view on the fundamentals of the company as I’ve not looked. Everyone says it’s good (and it may well be) but that’s not my job.

My job is extract short term profits based on risk/reward and sometimes flow.

Let’s see what happens. If I lose, it’s onto the next trade.

No trade should ever make or break you.

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