Weekly Options Countdown subscribers quadrupled their money
Weekly Options Countdown subscribers just notched a quick, sizable profit with our weekly First Solar Inc (NASDAQ:FSLR) 6/6 59.50-strike call recommendation. In fact, they quadrupled their investment in less than one week.
When traders received this commentary on Sunday, June 1, the solar stock had pulled back to its 20-day moving average after surging 60% in eight sessions. The shares were getting bought off, and had potential to start a nice uptrend, as sellers appeared ready to clear and looked for a move to the 200-day trendline.
Based on the open interest (OI) configuration at the time, heavy put volume forced market makers to short FSLR to hedge the unwinding of calls and gap fill. This created the opportunity for FSLR to bounce back and force short hedges to come off. Volume fell substantially the week prior, too, with selling pressure likely falling with it, which enabled buyers to get in on the next leg higher.
Short interest had risen only slightly in the weeks prior, suggesting shorts were not in attack mode. It also made up 11% of the stock's available float, signaling the pullback was triggered by hedges.
First Solar stock bounced off a floor at $150 after our recommendation, stringing three-straight gains before subscribers closed their positions. Though the stock went on to score another win, shares peaked the day prior before pulling back, enabling our traders to collect a 300% profit.
