Legendary fund manager, Peter Lynch was once quoted as saying “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

I agree, trying to predict where a stock is headed based on news and current events can be detrimental to your long-term success as a trader and investor.

That’s why I try to turn off the “noise” and focus on what matters most—price action.

My watchlist ideas and trades are almost always based on patterns and price action.

And to help me stay in line, I use tools like the S.A.M AI Scanner.

By focusing on A+ setups, my likelihood of success increases dramatically. It’s how I was able to grow my trading account from $37K to $2.7 million in just four years.

The setup and stock I want to bring to your attention today is Spotify Technology (SPOT).

Spotify is a leading digital music and podcast streaming platform that allows users to listen to millions of songs and podcasts on-demand.

The company operates on a freemium model, offering both free ad-supported and premium subscription tiers.

Spotify reported strong second quarter results for 2024, exceeding expectations in several key areas. They saw higher-than-expected premium subscriber additions and achieved better-than-guided gross margins.

The streaming giant is showing promising signs of improved profitability, aligning with their long-term goals for gross and operating margins.

It is expanding beyond just music streaming, with significant investments in podcasts and audiobooks to diversify their content offerings. They’re also exploring AI-driven personalization features to enhance user experience.

But I care less about that, and more so on the setup.

After its earnings in July shares spiked above $340 from the $295 level.

But sold off with the rest of the market in early August dropping to $300.

It quickly rebounded back to the $340s which it has been consolidating for the past couple weeks.

And that’s exactly what I’m looking for from earnings winners. After the big move up, I want to see if it can hold the new level and consolidate– which I do believe it did well.

Shares are now making a run to its 52-week highs which is $359.38.

Why do I think it has a chance of getting there and getting new 52-week highs?

The stock is currently in a daily squeeze.

A squeeze can signal a potential big move in a stock after a period of low volatility.

Think of it like a pressure cooker – the longer the steam builds up inside, the more explosive the release when the valve finally gives way.

Overall, I think the setup is there, and the chances of it going higher are likely.

However, with NVIDIA earnings tonight, I do think it will have a significant influence on the tech sector overall.

So that’s something to be aware of.

Your Action Plan: I’m watching SPOT for a potential long in my Daily Profits Live Portfolio. If I do take it, I will be using call options to express my position.

The stock has a good chance over the next week or two to break above its 52-week highs, with stacked EMA’s and a daily squeeze working in its favor.

If you’d like to learn more about my trading style and how to watch me in Daily Profits Live, check this out.