VRT could bounce a little this week on a green hammer, channel support and RSI trying to lift from oversold, but the daily downtrend is expected to continue after any gap fill; it has lower highs, is below the 200-day moving average, and has lost the 20- and 50-week moving averages with weekly MACD bearish.

You chose Vertiv as your first stock today. I mean, they are involved in building AI data centers. So there is a lot of discussion about its sustainability. However, it has maintained a profit of about 30% since the beginning of the year.

Yes, I'm planning on this very short term because their earnings report will be released next week. But if you look at the beginning of the year , February, you will see that there is a large technical gap around $199 to $200.

So I'm not taking any action right now as the stock is now trading at $208 or $209. But if the stock drops into that area soon , I'm thinking of selling a put spread that expires this week.

That is, this is before their earnings report is released. I plan to raise about $1.75 by selling the 197.5 and 192.5 put spreads.

Those who are watching this now, they won't get this credit now, but if the stock drops into that gap area , then I'm only thinking about doing so. Yes, of course. I mean, you could argue that the share price could go up a little bit this week.

You can see that for the past year or so the stock has tried to consolidate and then move higher , and just a year ago at this time it was trading around $150 to $200. We used a kind of ladder-like approach to climb to the top, and now in May we are seeing a kind of ' blow off top' pattern.

We have been seeing lower highs ever since and unfortunately, the downtrend continues below the 200-day moving average, which is a bit of a warning sign. But why am I saying that there could be some upside next week , is because on the last 15th we saw a big green hammer candle and we have a gap that has not yet been fully verified.

And we are touching the key support area of this channel here on the daily chart. The RSI is trying to rise above that oversold level. The MACD is still in a bearish position. If we go back to the weekly chart, you can see a pullback or downtrend over the last 3 years and we are now at the lower end of that trend line , as well as having lost the 20-week and 50-week moving averages.

RSI is in a slightly bearish position; The MACD is in a bearish position. But again, the short-term trade that Scott is talking about, maybe we will fill that gap on the daily chart and then the main trend, i.e. the daily chart's downtrend, will continue.

Well, we have earnings or earnings reports on the 28th , but this trade does not include that potential influencer of Vertiv, which is up in today's session. They increased by more than one and a half percent.