$450 first SPY support level.
Potential rounded top in play for QQQs.
Todays trade is on AI , earnings came in and the market was not impressed . Revenue beat expectations but missed badly on earnings. Last year was break even on profits while this year dropped to losing .37 cents a share. But forward guidance says it expects revenue to grow to $56-58 million. After this shock to the downside, I am going to STO 45 put and BTO 40 put and then I am going to BTO 45 call and STO 55 call spread , My cost to buy this position will be approx. $2.10 debit . I have potential to make $790 roughly but I can lose as much as $71.00 as i paid a debit on this trade and the stock can still crater.
Milwaukee based A.O. Smith Corporation ($AOS LTP $73.71) is one of the world’s leading manufacturers and marketers of residential and commercial water heating equipment with production facilities in the US, Mexico, China, Canada and Europe. In their 2nd Quarter reports the company announced 30% growth YoY for the quarter based on solid demands and production delivery. The stock broke a key resistance level on Thursday and closed the day at all time high of $73.71. Currently, it has good momentum to possibly achieve new heights over the next few sessions when the stock surged from the recent 50EMA and breaking 20EMA today creating a pattern of bullish hammer candle pattern on the charts.
On the downside, the stock is already in an overbought region in stochastic with low volumes. Unless there is strong demand in the next few days, it could possibly fall quickly with a small correction in the SPX to the next support level of $71.39.