A Literal Interpretation

Alternate Title: "If Zoom Goes, We All Go"

A fairly obvious, bullish cup-and-handle setup on the IGV, software sector ETF, daily chart (highlighted in light blue, below), is on the minds of many bulls right now looking for any positive Stimulus Deal headlines to propel us higher yet for another round of TikTok tutorials on how to make a score in weekly call options in hot names like ZM. 

In lieu of taking that interpretation, given both the long-term steepness of the tech and software uptrends (QQQ and IGV on their monthly charts, respectively, for example) and the general frothy nature of sentiment, I am taking the other side of the trade here, going SHORT IGV for a swing just above $331 with a $360 cover-stop, inside Market Chess Subscription Services. 

While I recognize the overall trend is firmly higher, and that this tape has been a freight train since the March lows, I am ready for a fight and have my warrior armor in place, fitted and firm. 

If the uniquely stretched and crowded (and loved) Zoom Video cracks, an IGV holding, I suspect many other software names which have been treading water the last week or so as ZM soared will fall hard and fast, too. Simply put, I like the risk to reward to this trade immensely and am willing to risk capital on it in full internet/Twitter finance view. 

Part of analyzing chart patterns is being able to reconcile various timeframes with an obvious daily chart setup like this cup and handle. I have seen these spots before--One-way rallies with another seemingly slam-dunk long setup but with the steep long-term trend begging to correct: When the long-term trend wins out it is often and abrupt an unforgiving breakdown, and hence the risk-to-reward for the short becomes highly favorable, especially if I am able to quickly cover into a gap above recent highs even well before my preset stop is hit.