Overbought Stock of the Day: Discovery Inc. (DISCA)
Media companies have had a strong year, as pandemic-driven trends have increased screen time. That’s created a number of strong rallies in a number of companies leading to periodic overbought moves. One such play right now? Discovery Inc (DISCA).
Shares have soared to $50 from $20 in early November, a 150 percent move higher. That move has led to a number of overbought conditions, which usually cause shares to trade flat for a few days, or slightly dip, before moving higher. With the stock’s relative strength index, or RSI, topping 82, shares are well into overbought territory once again.
Action to take: The strong uptrend appears likely to continue, although the stock’s trading history of the past few months suggests a few days of sideways trading or even a modest pullback. In other words, despite bring overbought right now, this is a poor candidate for going short, but makes sense for going long.
- Investor Who Predicted 2008 Crash: “The Mother of All Crashes is Coming”
If you've watched the movie The Big Short, you've heard of Michael Burry. He was one of the few who not only predicated the 2008 crash but profited from it.
He made $750 million for his investors and $100 million personally when his bet against the housing market paid off.
His next big prediction? He's warning the "mother of all crashes" is coming.
If you have any money in the markets, I urge you to click here and get the exact day of the next stock market crash.
The July $60 calls currently have a bid/ask spread of $2.80, but on a few days where shares don’t rally could likely drop into the low $2 range. At that price, traders can buy call options and look to profit from the next move higher. The option even has a decent chance of moving in-the-money in the coming weeks after the next sideways move to take some of the recent froth out of the trade.