As many in the U.S. take to the road ahead of the long Memorial Day weekend, if you’re one of the 23% of Americans who gets no paid vacation time, at least you can check into a two-week trading opportunity for a quick return in Hyatt Hotels (H).
A hospitality company that owns more than 554 properties in 47 countries, Hyatt has had an unbelievable year, delivering four successive earnings surprises and announing May 16 that it increased its share repurchase program. Profit Scanner powered by Recognia analyzed H’s chart, which suggests the upward momentum will continue. There’s a near-term opportunity for traders to profit.
At the May 21 close, Hyatt’s chart flashed a bullish Flag pattern, indicating the stock could move as much as 12% in just 13 trading days.
The pattern tells traders that a stock’s price appears to be resuming a sharp rally after it has taken a temporary pause. A bullish Flag pattern occurs in the midst of a robust market rally, representing a temporary pause as the market attempts to catch its breath before taking off again.
Hyatt’s bullish Flag has a short-term upside target of $63.75 to $65.00, expected to resolve by about the second week of June. It should be noted that the pattern emerged on just about 200,000 shares traded, which is a fairly small number out of context but is actually fairly heavy compared to Hyatt’s typical trading volume.
But, given that, it’s important that traders keep watch over support and resistance levels. Support falls at $53.74, so there’s some room for Hyatt to swing before traders should worry but there is resistance at $58.17, so traders may wish to wait and see if H can close above that level before initiating positions.
A stop loss is a good idea, too. Profit Scanner has identified that Hyatt closing below $54.86 offers a good medium stop to help traders manage losses.
But if you do your homework and Hyatt checks out as a potential trade, remember that you while you can certainly buy the stock, you can consider a short-term call options trade that will allow you to place a speculative bullish trade on Hyatt for a fraction of the cost.
Profit Scanner does not analyze or present potential options trades, but there are plenty of resources if you’re interested in getting started with options trading. The power of options is appealing because they require far less capital than buying or shorting a stock.
Consider that if you were to buy 100 shares of Hyatt stock, you’d need roughly $5,800 (plus commissions). But if you purchased one Hyatt June $60 Call, which entitles you to control 100 shares of the underlying Hyatt stock, you would spend approximately $89 per contract (plus commissions). That’s quite difference.
Again, be sure to vet out any potential trading opportunity before taking action, but this summer if you’re stuck slogging through an endless summer with nearly a quarter fellow Americans, use the time to brush up on how options trading can lead you to some quick returns, especially in short-term setups like the one Hyatt is offering.
Profit Scanner powered by Recognia can help traders of all levels find new trading customized trading opportunities for finding the best stocks to buy or short in specific sectors, price points, timeframes and so much more. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.