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.
When Rocket Companies Inc (NYSE:RKT) reported fourth-quarter earnings on Feb. 25, shares soon hit the moon.
Rocket Companies reported a 162% year-over-year increase in revenues of $4.8 billion, beating the Street’s estimate of $3.9 billion. Earnings per share of $1.14 beat the estimate of 87 cents.
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Rocket Companies also announced a surprise special dividend of $1.11 per share that was paid to all shareholders as of March 9.
In the three days following Rocket’s report, shares skyrocketed 116% to an all-time high of $43, partly due to the WallStreetBets community piling into the stock.
Like many of the other stock targets in the community, such as GameStop Corporation (NYSE:GME), the parabolic rise was followed by a plummeting fall, and shares of Rocket Companies are down almost 50% from that $43 high.
Could Rocket Companies pull off another big surprise when it reports earnings Wednesday after the closing bell?
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The Rocket Companies Chart: On Monday morning, Rocket Companies opened on resistance at $22.65 and rejected it. The stock is also trading slightly below the eight-day exponential moving average and the 21-day EMA, with the eight-day EMA trending below the 21-day EMA, both of which are bearish indicators.
The stock has spent the last 32 trading days near the $23 level, trading in a sideways pattern, with a lack of any bullish or bearish bias. Rocket Companies has had low trading volume over the past few months, which shows there's both a lack of buyers and sellers of the stock. This indicates news, or earnings, could bring in volume to force the stock to choose a direction.
Bulls want to see bullish volume come into the stock prior to or directly after the company releases its earnings report. If the stock can regain $22.65, it has room to move up to $26.70 before bumping into another resistance level.
Bears want to see large bear volume enter after Rocket Companies releases earnings to push the stock down towards the $19 level.
RKT Price Action: Shares of Rocket Companies trade around $22.40 at publication time.
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.