The Big 3: IONQ, AKAM, STM

Marlee Caden (0:02)

Welcome back to Trading 360 I'm Marlee Caden. It's time for The Big Three. We've got three stocks, three charts, and three trades for you. Rick Ducat will take us through the charts. Here to take us through the trades today is Mike Shorr, Director of Trading Education at Prosper Trading Academy. Great to have you both with us. Mike, I wish your dog had stayed with us. I saw in the break you were petting your dog.

Mike Shorr (0:21)

I know, I know, I know. She is, she's persistent.

Marlee Caden (0:26)

Well, she's always, she's always welcome. Anytime she wants to join. But why don't we kick things off with how you're looking at trading so far this week. We've got quite a bit of macro data coming our way. We got a little bit yesterday. What are you seeing right now?

Mike Shorr (0:39)

Yeah, I think that we are kind of in a holding pattern. You know, we got jolts today. Mark didn't react to it, but we do have PC and unemployment and a slew of other things and a lot of Fed speak. It just kind of seems to be the lull behind the storm right now.

Marlee Caden (0:54)

All right, so let's dive into the big three then see where they fit in the lull ahead of a potential storm. You've got IONQ as your first pick in the big three today.

They drew some fresh attention when B of A gave them the buy rating and a $60 price target right now. They're about $44.40. So how are you looking at IONQ?

Mike Shorr (1:13)

So, you know, I like the fact that it's gotten above and it's stayed above the 200-day moving average. And so I was looking for that continuation just slightly above its 100-day. And then I was actually, I'm looking at the $55.60 call spread.

Marlee Caden (1:33)

All right, Rick. So as we look across here, and he's looking at a $55.60 call spread here, we don't have their earnings until early November. So that's not a risk here in this trade. What are you seeing in the technical setup here?

Rick Ducat (1:47)

Yeah.

So what we've seen recently has been that we, after hitting our 52-week lows of 25.89 in late March, we had a strong rally following earnings, and really before earnings too from April. And then a moderation of that trend. If we could pull up our chart, we could see that we hit a low point here near 35 recently. We also did not quite fill a small gap that was formed 31.81 at the start of our climb to the upside here. But from there, we formed higher lows. So our blue trend line, not really as important anymore here because we have our white trend line in play, which is a much steeper and sharper slope to the upside. So then also above that, we could see 54.84 was another notable high as well. So to think about our moving averages next, we are starting to see some improvement. We were all clustered together in a relatively close distance. Now they come in between about 41 to 44 Our five day and our 251 day exponential moving averages are pretty much right on top of each other around 43, 44 or so. So that's our longest term representing one year and our shortest term representing one week that also line up roughly with our trend line in white. So this gives us an easy point to watch out for potential support if you're bullish or a breakdown if you're bearish. Meanwhile, RSI, our measure of momentum, shows that we have crossed above the 50 midline a few weeks ago here. We are in danger of breaking our shorter term green trend line, but for now we remain in the bullish territory. Volume profile shows that our node in question that is largest is between about 40 to 50 Our point of control comes in at 45.81. So that's the heaviest trading volume area of all. It would be notable if we were able to cross above this area. Notice as well to recent volume spikes that we saw in our volume bars at the bottom of the screen there, suggesting heavy activity recently in this name.

Marlee Caden (4:06)

All right, Mike, so take us through some more details in this call spread here and how you'd play IONQ in the short term.

Mike Shorr (4:13)

So, I'm just using regular October, that's October 16th. I think I misspoke before the 4550 call spread. We can buy that for 115, max lost 115, max potential return 385, and you're getting 3.35 to one on that.