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Stock Ready to Bounce Back
One of my main strategies for trading is to find a stock that’s down big for no reason. Usually, this happens with small caps a lot because one holder liquidating their shares can cause the market price to fall significantly.
Another strategy I use is watching for unusual option activity. If several different strikes on one stock are seeing huge buying activity, than it could be an indicator that the stock is going to pop.
Today, I’m seeing a stock that fits both of the strategies above.
It’s Futu Holdings Limited (FUTU).
The stock is down 9% today on regulatory concerns after China cracked down on Didi just after it made its US stock market debut.
While this is definitely a legitimate concern for FUTU, there is no real news related to the company specifically.
FUTU gapped down and has been flat all day, another good indication that it could be setting up for a recovery soon.
I also noticed large call buying in FUTU this afternoon.
There’s large buying in the August 20th calls with strikes of $155, $160; as well as several of the November calls.