Listing Losses Pile Up
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The London Rush
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Morning, I'm Chloé Meley
It's setback after setback for the London Stock Exchange, and it's not even safe on the weekends.
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However, the most intriguing development in my opinion is CMG's quantitative signal. In the past two months, the security printed a 4-6-U sequence: four up weeks, six down weeks, with a net positive trajectory across the 10-week period. This is a rare pattern, materializing only 27 times over the trailing decade. And in 66.67% of cases, the following week's price action results in upside, with a median return of 3.05%. Two circumstances shine a bright light on the above setup. First, CMG stock seems to respond well to positive momentum. While the balance of distributive sessions was greater in the past 10 weeks, the overall trajectory was still northward — and that generally tends to be a bullish sign. Second, as a baseline, the chance that CMG stock will be profitable over any given week is 51.47%. Therefore, long-side speculators are incentivized to consider a debit-based strategy. Aggressive traders may consider the 53/55 bull call spread expiring July 11. Using data from Barchart Premier, the call spread screener effectively identifies the 53/55 spread as arguably the most compelling idea from a risk-reward standpoint. Traders can lower the probabilistic risk to the 51/54 spread; however, doing so dramatically lowers the payout. Right now, T-Mobile US (TMUS) stands at an awkward juncture. TMUS stock started the year auspiciously, at one point gaining about 24% on a year-to-date basis. Since early March, however, the security hasn't looked appetizing, losing roughly 19% of equity value. Still, a quantitative signal suggests that a reversal may be in order. In the past two months, TMUS stock printed a 4-6-D sequence: four up weeks, six down weeks, with a net negative trajectory across the 10-week period. At first glance, the balance of distributive sessions outnumbering accumulative may not seem like a good sign. Nevertheless, in 62% of cases, the following week's price action results in upside, with a median return of 2.48%. On Friday, TMUS stock closed at $221.52. If the implications of the aforementioned sequence pan out as projected, the equity could reach over $227 quite quickly. Should the bulls maintain control of the market, they could drive the price above the $230 level over the next few weeks based on past empirical analogs. Those interested in taking a shot may consider the 220/230 bull call spread expiring July 18. This trade gives you about four weeks for the above thesis to pan out. If TMUS stock rises through the short strike price ($230) at expiration, the maximum payout for this trade clocks in at over 105%. As a metals and mining company, Vale (VALE) commands significant relevance. At the same time, global economic uncertainty — exacerbated by ideological paradigm shifts and now a geopolitical crisis — fundamentally clouds the narrative. On the technical front, VALE stock has gained just over 2% YTD, with the security struggling for traction since early April. Still, those who understand the ebb and flow of the financial markets may be enticed with the mining enterprise. Quantitatively, in the past two months, VALE stock has printed a 3-7-D sequence: three up weeks, seven down weeks, with a negative trajectory across the period. Ordinarily, the balance of distributive sessions grossly outweighing accumulative is a cause for concern. For VALE, it's an invitation to put it on one's radar. In 60.47% of cases when the 3-7-D sequence flashes, the following week's price action results in upside, with a median return of 2.79%. What makes this setup all the more enticing is that, as a baseline, the chance that a long position in VALE stock will rise over any given week is only 49.91%. Statistically, VALE suffers from a slight negative bias. However, the aforementioned sequence tilts the odds in favor of the bullish speculator. Further, should the bulls maintain control, VALE could move toward the $9.50 level over the next few weeks. With the market intelligence above, traders may consider the 9.00/9.50 bull call spread expiring July 11. While there are certainly call spreads with far bigger payouts, the 9.00/9.50 is arguably the most realistic transaction. On the date of publication, Josh Enomoto did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on 登入存取你的投資組合
