Hello Insider,

If we here at RagingBull tried to take a shot every time a millennial acted a fool committing fraud our poor livers would pack their bags and close up shop.

And today we have a triple shot of shady…software engineers that according to the SEC did a very bad thing.

But that doesn’t stop trading experts like Ben Sturgill who is not a stranger to the dark pools from taking advantage of smart money moves just like these.

Before we dive into Ben Sturgill’s ways of the world… Let’s jump into these employees from hell’s shenanigans as Ben would say.

The sin? Insider trading and folks it became a family affair.

This trio was employed at Twilio Inc (NYSE: TWLO) and being software engineers they had access to multiple databases that contained Twillo’s revenue….

Now back in March 2020 when most of us were stressing out over where our next roll of toilet paper would come from…The SEC claims this trio discovered Twillio’s customers were beefing up their usage of the company’s products and services thanks to the pandemic.

Together they came to the joint conclusion that TWLO’s stock would “rise for sure” thanks to the extraordinary circumstances.

The plan was hatched

Twilio has a strict company policy that puts the kibosh on insider trading so this gang needed a way to skirt the rules….

This is where friends and fam came into play- I’m talking brothers, bedmates, and roommates.

All coming together to trade Twilio stock and options PRIOR to the company’s May 2020 earnings announcement with software engineers on of the software engineers funding his handing helper’s trading with hand loans.

By May 4, 2020, the trio chatted and finalized plans…… Plans to be “Miillionaireeeeee.”

D-Day

May 6th after the market closed Twilio announced its shining earnings for the first quarter of 2020. As a result, the stock price rocketed up 40% jumping from $122 per share to almost $170 per share by May 7th.

The software engineers had a plan for every price increase along the way… And together they turned a profit of over a million dollars.

Following  The Smart Money

When the dust settles insider traders like these 3 software engineers might not be what we would call “smart”

And I don’t want to shock you but… we can learn a lot from AND potentially make money by spotting their moves.

So how do we do it?

Ben Sturgill uncovers it after searching through a monstrous amount of data that lurks in the dark pools…

Spotting moves before they become news.

And Ben Sturgill wants to teach traders how he doesn’t get trade blocked by these smart money traders while using his custom-built scanner to sniff out these naughty Dark Pool trades.

You can join Ben Sturgill in his Dark Pool investigation searching for “smart money” right here.

We woke up to some very interesting news this morning… and it’s all about Tesla (TSLA) again. 

That’s right, our beloved (or “behated”, depending on who you ask) EV maker is back to making headlines and it’s over a stock split… Another one!

Here’s what Tesla slipped in a Form 8-K filed early this morning:

“On March 28, 2022, Tesla, Inc. (the “Company” or “Tesla”) announced its plan to request stockholder approval at the upcoming 2022 Annual Meeting of Stockholders (the “Annual Meeting”) for an increase in the number of authorized shares of common stock through an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Amendment”) in order to enable a stock split of the Company’s common stock in the form of a stock dividend. Tesla’s Board of Directors (“Board”) has approved the management proposal, but the stock dividend will be contingent on final Board approval.”

In short, the company disclosed that it’s planning to seek approval for another (a second one) stock split. 

The market is clearly enjoying the news – TSLA shares are gaining over 6% as of midday, holding steadily above $1000 for the first time in over 2 months. 

But will the hype be enough to keep the stock going? And what can we expect next?

Split-Frenzy

When it comes to splits, TSLA has been keeping good company. 

The famed automaker is set to join the likes of Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL), and Amazon (AMZN), all of which have done or announced splits fairly recently.

And I can’t blame these guys – the performance of many recent splitters suggests it’s a wise thing to do.

AMZN has gained over 10% since the announcement and for the first time in over a year manages to hold a short-term uptrend. 

NVDA, another one of the recent splitters, is up nearly 50% since the split. 

AAPL and GOOGL are also in the “green”. 

Money has obviously been flooding into “hot” stocks, once they become more affordable post-split. 

And I didn’t even mention the greatest post-split performer out there… you guessed it, that would be TSLA itself!

Tesla shares have gained nearly 130% since its original split in late 2020. 

Will history repeat itself this time around?

TSLA 2022 vs TSLA 2020

As much as we all wish for TSLA to give us another year of fun, the reality is a bit more complex. 

There are two major differences between TSLA in late 2020 and TSLA right now, in 2022. 

These are: 

1. The Market

In later 2020, right as TSLA’s split was announced we were at the start of one of the

greatest bull cycles in the market’s history – the SPY itself has gained nearly 50% since.

Of course, we may be at the start of another one right now, but let’s keep it real – there’s a good amount of healthy arguments over market overheating and the recent price action is proof. 

The market needs to at least hold-up – otherwise, it will be a major drag on TSLA.

2. Short Interest

Another, and perhaps bigger issue is short interest. 

See, a huge deal of TSLA’s ascent of the past few years has been the results of a short squeeze. The name is as hated by shorts, as it is loved by the bulls.

Short interest has always been elevated, and it gave the stock a boost each time it pressed higher.

But NOT NOW! Right now, less than 3% of TSLA’s float is short – that’s not a lot in either absolute or relative to TSLA terms. 

Based on the above, I think we should be careful with blindly jumping on the TSLA bandwagon again. 

I’m not saying the stock can’t double from here – if there’s one name out there that can gain insane momentum in a matter of days, it is surely TSLA.

BUT, I do want everyone to keep in mind that many forces that took Tesla where it is today, are simply not there anymore. 

For a long trade, I really want to see strong confirmation of momentum and support. 

Following today’s strength, I don’t want the stock to look back. 

I’ll consider a long trade back to the highs only if it holds steadily above $1020 over the next few days. 

If TSLA starts acting shaky – that’s a stay away for me.

You may recall yesterday’s letter – I said that the market is getting pretty darn hot. 

We’re seeing capital flow freely into all kinds of equities, from small to large – people are greedy for some upside!

Which to me only means one thing – time to dust off my Total Alpha playbooks!

ALTO Above $6:

I’m thinking the buyers are ready to finally take control in the stock and create some upwards momentum. 

For confirmation, I’m watching for 2 key indicators:

1. TTM Squeeze: The TTM Squeeze is reading red dots with a positive momentum histogram. I want to watch for the momentum histogram to stay above 0 (positive) and the bulls take control.  If they do and the dots fire green, I would expect a move to the upside, targeting the 127% and 161% Fib Extension levels.
2. On Balance Volume: Positive Divergence occurring at these levels with the OBV sloping higher while the stock is moving sideways. This suggests to me that buyers are still coming into the stock at these levels and the bears are weaker and will step out of the way once the trend resumes to the upside.
   

Hence, I plan to be in the stock above $6, with the stop right below it. My targets are as follows from the chart: $6.52 and $6.86. 

If you were to trade options, one contract I’m eyeing is 20 May $4 Calls – it allows for more leverage while keeping the risk relatively low. 

Just make sure you respect the same stop level and beware of the lower liquidity.

AMAT Above $37:

The idea here is similar to ALTO, albeit with one adjustment – AMAT has been on a slow grind higher and, market permitting, might be ready to have a strong push through. 

Should that happen – the stock may easily have a solid “next” leg higher – and that’s exactly my thesis. 

Confirmation: 

1. TTM Squeeze: The dots are red and showing positive momentum on the histogram right now. I want to see the bulls resume their upward trend with positive momentum and turn them green – signaling buyers are in control of the stock and bears have given in. 
   
2. On Balance Volume: There’s Positive Divergence forming with a rising OBV indicator. Positive divergence is confirming for me that bulls are in control of the stock, and once will support the up move once bear pressure eases. 

I’m looking to be long above $138 with a stop below $137. My two targets are $140.76 and $145.06 – both based on Fibonacci extensions, as you can see from the chart.

If you were to go with options, I like this contract: 1 APR $135 Calls.