Welcome to Trade Ideas.
I am Brian Price, joined today by Christian Fromhertz, founder of the Tribeca Trade Group.
Christian, great to have you with us again on Real Vision.
Great to be here.
So today we're looking at Visa.
You're bullish.
Tell me why.
Yeah, absolutely.
So Visa just reported last week.
And they've kind of been in a little bit of a holding period.
I think they were waiting for earnings, as well as the jobs report just came out last
Friday, which showed a bullish consumer.
So over just over 300,000 jobs created versus 165,000-- that shows me that the jobs market
is growing and this should be good for the consumer.
So let's shift for a moment over to the technical side of things.
What are you seeing as far as this setup is concerned?
What are you encouraged by right now on the charts?
Sure, and that's what I really like, being that visa has been in a holding period.
And it was coiled for a couple of weeks.
So it really wasn't moving too much.
So it needed that catalyst of earnings and just to show that they are continuing to grow.
So if we go over to the weekly chart, what I like to see first is just progression.
In the last week, it actually took out several weeks of price action.
And it's kind of caught right in the middle of the range and just starting to move above
its downtrend line.
So what I like there is that weekly bullish engulfing candle, which is taking out the
previous weeks.
Also on the weekly chart, it hasn't quite triggered yet, but something to watch this
week would be an MACD crossover.
Christian, an engulfing candle-- that sounds like a romantic comedy.
I don't know what that is.
So what is an engulfing candle?
Walk me through that in layman's terms.
Sure, so last week's price action, both the high and the low, took out several weeks prior.
So it's a bullish signal when price starts to take out those levels.
Is there anything else you can look at, a MACD, relative strength?
What are some other technical indicators that folks can use at home?
Sure, and that's the one thing on the weekly chart to keep in mind.
For confirmation purposes, you could wait for that MACD crossover.
So this is a new trade idea.
You could wait a couple more days till that develops if you're a more of a long term trader.
So, Christian, that's what you're seeing on the weekly chart.
How are things setting up on the daily chart?
Sure, on the daily chart, it's just a little bit more granular and you could see that coiling
pattern that we saw for the previous weeks.
And sometimes what we'll see going into earnings or right after earnings is a little bit of
a fake out.
And price actually started to lead a little bit lower and it snapped back higher, which
is nice.
And then we closed on Friday above that range.
What about comps?
What do you like about Visa?
What's appealing to you about this name versus other names in the same space?
So just the fact that I think Visa is one of the leaders of the group and they're continuing
to grow.
I think their earnings showed that they are continuing to grow.
So Christian, as, far as the key driver of your thesis is concerned, does it stem around
this breakout that we're seeing as a result of a strong earnings quarter?
Absolutely.
What I'm looking for is where the technicals to align after earnings, and it looks like
that right now.
It just got above that downtrend line.
So I think that's a crucial point to focus on.
So with all of this in mind, let's break down the trade itself, what you're seeing on the
levels, and what you're looking for in time to come.
Sure, so since this just broke above its downtrend line, you could use a stock price right around
134.
And then what I would be looking for the upside target is for it to get back to the 52 week
high.
What I like about this is you could either play this in stock or options.
Options are pretty cheap in the name.
We're looking at an implied volatility in the March options of a 17, which is cheaper
than the S&P is right now.
And we could just go out a month, so looking at the March 15th 145 calls that are trading,
give or take, around $1.60.
It's a nice way to leverage up a play with a high price stock.
Terrific.
Christian, thank you, as always, for joining us on Real Vision.
Thank you.
So Christian is bullish on Visa.
He likes staying long ticker symbol $V above 134 with a target price of 150.
He expresses his bullish view by recommending the March 15th 145 strike call option for
approximately $1.60.
That's Christian Fromhertz of the Tribeca trade group, and I am Brian Price for Real
Vision's Trade Ideas.
Thanks as always for watching.