27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Hertz Global Holdings, Inc (NYSE:HTZ) stock had been on quite a run since bottoming at $8.52 back in June, but the rally came to a halt on Tuesday when the stock plunged more than 20 percent following disappointing Q3 earnings reports from competitors TrueCar Inc (NASDAQ:TRUE) and Avis Budget Group Inc. (NASDAQ:CAR).
Tuesday’s big move did a lot of damage to Hertz’s near-term technical picture, but the stock remains up 36 percent over that past six months.
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Volatility
Hertz has been an extremely volatile stock, making the technical picture critical for traders. Tuesday’s sell-off marks the first time Hertz has traded below its 50-day simple moving average since early July. Hertz had more than tripled off of its summer bottom, and now bulls are hoping that the $20 support level will hold. In addition to the psychological component of an even number like $20. The stock found support at around $20 during a previous pull-back in September.
Below $20, Hertz likely won’t see technical support until around $17.80. The stock’s 200-day SMA is currently right around that level, and $17.80 previously served as resistance both in April and again in July.
Expectations
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Hertz bears can argue that the stock never even came close to returning to its post-restructuring highs in the low $50s, and the 2017 rally was nothing more than a lower high in a long-term bearish trend. From a fundamental standpoint, many investors are questioning the role that traditional rental car companies will have in an increasingly automated auto industry.
Expectations are low heading into Hertz’s earnings report on Thursday. Traders should watch for a volatile market reaction and be quick to reassess the stock’s fundamentals following its earnings report.
Joel Elconin contributed to this report.
Related Links:
Avis, Hertz Provide Glimpses Into The Car Rental Space Of An Autonomous Future
Analyst Stays Bullish On Hertz After Dismal Q2, Questions Remain
Image credit: dhub limited, Flickr
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.