 Welcome back with us folks tonight. We're talking about LMT Lockheed Martin The ticker was a swing plate that we picked on The 14th, which is two weeks ago and we closed on Friday Well closed the remaining position on Friday on expiration day And I want to talk about many topics that we have talked about Before and that apply to this trade and look at this and these are news the other thing is a earning play Because they have earnings Next week and the last thing is a breakout and I may I may add another thing will be a gap fill So basically all these things will be covered tonight regarding the play and I mean When this happens when you see this ahead of time you can anticipate the move and With news with the earnings coming up a breakout and a gap fill we had a recipe for a Trade that will pop well it did pop and we ended up doing pretty well, but I'll show you how to spot these and how to be Confident with the moves. So let's start with Let's cover the news part Right now the situation if you are not aware Situation there there are some tensions between China Mainland China and The in Taiwan now, I'm not going to enter any politics I'm going to be very Try to remain very simplest to keep it very simple Taiwan is an island that is located just outside the mainland China and right now the Tensions are pretty hard high between the two. We are aware that China Taiwan is a enormous manufacturer of semiconductors and this Shortage is now hurting a lot of the EV the car industry and And It's it is appearing to be a little escalating. So The US is Not taking position. However, they sell They will sell arms guns and other supplies To the Taiwanese and it's been like this for a while. So the high rising tension Is on the news side. The news are earnings coming up next week. So basically we were two weeks ahead Moving into this This earnings season high earnings season We are hitting an area where earnings we can anticipate a move to the upside Now the breakout I'll get back to this which is this black line that you see right here Is a price level line that is already in the chart and I'll show you afterwards and the gap fill If you don't mind, I'll get rid of everything here. So you can see it clearly the gap fill was basically The gap that would fill above this and that there is nothing in between So we're looking for an area where we have nobody I've showed you this before Basically, we're going up the stairs with nobody coming down the stairs in the way selling. So basically it's going up with no resistance So let's get back to the so this is the gap fill situation Let's get back to the price level, which is the black line here and the breakout above What we are looking at so look at this black line Where does it come from? Why is it there and how did this come alerted and the play and I'll show you exactly and I'll move back. I Mean I don't mean months Years look, this is the date chart, right? I'll move back to a long time ago and Why is this in my chart and I'll show you exactly why this is where it all happened in 2018 you see this We have a top another top and again. So what happens is we have buyers that are really Willing to take the risk up to this point where they start selling same thing here This starts selling same thing there as soon as we reach this line. There's something about this line Something about this line that it makes it, you know, very strong resistance Now you can tell you will eventually see that once we break this line It will and what this is what we're expecting it will act as new sport Now, let's move this Closer to where we are and we will See so basically this line. Let me back up a bit basically this line You put it you put it on your chart and it's a price level It's a price level that you know something will happen. So you put the line what I do is I just hit the Price level line and price level is set. You see 362 22 You know, it's a $300 sock. So it's it can be Plus or minus a few pennies but close enough to that and then oh it broke above in this area I had to consolidate and then it broke above Look what happened Now as it broke above it came down to this point right on support So we know it's support it went to all-time high it came down to where same line Right and then broke bearish now. This is early 20 2020 COVID after March See when this bounce happened We went to where same thing same line and then after that We broke bearish just under it a little bit here. We had consolidation Broke under it, but the fact of the matter is it's an important line that you need to follow and this is closer to where we are right now and Basically, let me zoom in This is the daily chart see we Broke right under we were right under the the line maybe a little tiny bit above a Tiny bit above and rejected the line. So what we're seeing is this Guy and this guy are now the new resistance on the way up because our line was Precise and they have moved the line just a little bit higher. See They poke their heads just a tiny bit above it. So now This is the line, right? I Still like the black line you see why because you know where it has in history, but Twice now we've hit this line a little above however There's a gap and let me put this in a darker blue This is the gap that we're looking at this eventually will get filled quickly So how to trade this? Is this I have I sent an alert on the black line as we're going up. I Also set an alert on this top here When we hit the top It will trigger why because it will do either thing either we bring above it and Then we move away from it or we we're going to reject it You saw in the in the previous example where I showed you the third rejection of the line It could have been this that and then here we could have hit it and then reject it to the way down however in order to add to our our trading lab analysis, we have the Taiwan situation Which is one thing we have second thing earnings coming up which which can be bullish and We have the gap fill the possible gap fill above if we start breaking above So to me this was basically a no-brainer to get in the trade and we got in if you don't mind I'll show you on the hour chart. Let's move out of here and Shift to the one hour chart we got in on the 14th This is what it looked like. Basically, you see that Was alerted right here we In my chart it was alerted as it crossed the the black line and then this was the look that it took and At the end of the day, this is when we alerted the 325 365 sorry for The the LMT play now the next day you see that we were Green on the play right away. It acted as Support the line that we had and then we started moving up Same thing again on Monday. See this black line acting as support and we started moving up now along the way as We moved towards our target first target was the gap to fill and as soon as we filled the gap Here was the the gap that I showed you before we took partial exit and Then we kept on moving to the upside and we eventually Sold on Friday not at the top. We sold a little Before the top but the entry was on the Thursday the 14th 365 calls for 297 and we ended up selling the remaining position at a flat 11 So this is a very profitable trade that We had picked Because we have the many of our recipes that work for us That were in line. So the gap filled possible on the upside the earnings coming up the Breakout of a long time support or resistance line And if you're asking why we didn't pick the earning wheat expiration which is next week well the premiums would have been a lot higher because of implied volatility so Playing the ramp up was the play and It ended up being a very profitable play So I hope you guys are learning to add a few things to your toolbox and To juggle with all these tools together as you all saw that we we are Joining many of the tools that we have played before Together in one trade that ends up being Very profitable. So again, thanks for watching and I will see you soon