Trade Plan for Lithia Motors Inc. (LAD) for week of May 27th

Overview:

LAD gapped up above the critical 306.80 high-of-low resistance, retested and held, signaling strong momentum. This breakout confirms 306.80 as solid buyable support moving forward.

The primary focus now shifts to targeting higher levels, while 306.80 serves as the main entry opportunity on pullbacks. Long-term support remains at 271.81, but the breakout above 306.80 suggests that near-term momentum is intact.

Upside Trade Strategy

1. Buy Signal on Pullback to Support

• Entry: Buy near 306.80 on a retracement, as it now serves as a buyable support.
• Stop Loss: Weekly close back below $300.00.
• Target 1 (short-term): $357.93 (Fibonacci resistance level).
• Target 2 (long-term): $417.98 to $424.84 (March 2021 all-time high and rising channel top, respectively).
• Estimated Timeframe: 3 to 5 months for the move to the low $400s.

Options Trade (Optional for Long Strategy)

• Call Option (Aggressive):
  • If we get the pullback to support, consider long-dated calls (6–12 months out) with a $420–$430 strike.

Risk Management Guidelines

• Never allocate more than 10% of your portfolio to a single position.
• Ensure your stop loss limits your total account loss to no more than 2%.

Join 1,000+ Smart Investors Unlocking Big Opportunities

Get exclusive access to premium stock picks, real-time market insights, and powerful updates that keep you ahead. Starting today, claim our latest high-potential stock picks—absolutely free during your 5-day trial.

Ready to uncover the stocks primed for big gains?