Here’s your trade on Bitcoin, $IBIT and $MSTX – November 13, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I’m actually not going to look at Bitcoin, I’m going to look at IBIT ( NASDAQ: IBIT ), but I want to start here.
If you look at the weekly chart, you can see how this chart has been in a growing volatility squeeze for much of this year. Then it finally just broke out last week in a really, really cool move, this has been a heck of a move. If you look at it on the daily chart you can see that we got a move above 70.00, which stayed. Then we kept going and today we were actually up above 92.00. This is what the daily chart looks like, it’s really nice, right?
Now we look at the “tracking” ETF, IBIT ( NASDAQ: IBIT ) and we can see this, it runs up here. And then it had a pretty nasty close, where it really opened pretty flat and then traded up from the open almost 4.5 percent, but then it couldn’t hold. It traded back down and closed really just about right dead balls on the low of the day, this is the 13th here, and this is our trading range here.
This has been a complete reversal, I’m talking short-term, but short-term is all that matters right now if I’m thinking about buying or selling a stock. If you look at this, it’s been above two standard deviations, these are the upper Bollinger bands here, for the past several trading days, six trading days in a row this thing has closed above there.
At some point that move is going to run its course, I really feel like it has today. So my suggestion is, if you’re long IBIT ( NASDAQ: IBIT ), I’m not, I’m long something else. But if you’re long IBIT ( NASDAQ: IBIT ) I think it’s a good time for you to take some off the table or even close a position.
I had drawn this a couple of days ago, telling members, that if you see this kind of a move, an extended box down like this, this is a three-day reversal, then you really need to get out of the stock.
Will we get here tomorrow? I don’t know, but this is what I’m seeing. I’m looking at a MicroStrategy ( NASDAQ: MSTR ), double your fun MSTX ( NASDAQ: MSTX ), where we did get this really gap up, kind of a gap and crap bearish engulfing pattern. When I see these proxies or derivatives for Bitcoin moving lower while Bitcoin is still moving higher.
All that’s telling me is that there was a lot of money coming into the equity aspect of this, the stocks ETFs, and now the money’s run its course so these aren’t finding bids. You just have to decide whether you want to be investing or trading. My suspicion is, that because of the volatility you’re probably trading, and you should. I would have taken profits on this or do as I’ve done, sell out of the money calls on MSTX ( NASDAQ: MSTX ) here.
There are no options on IBIT ( NASDAQ: IBIT ) but the volatility is so high on MSTX ( NASDAQ: MSTX ) that as long as you’ve got some kind of profit in the ETF, you can be selling out of the money calls until the cows come home. Ultimately, you’re going to have a negative cost basis in the stock. This really, really has a lot of implied volatility and it’s fun trading options on it.
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