In last week’s Flip the Chart column, I recommended buying-to-open a MPWR March 17, 2023 $490/$480 Put Spread – and I’m sure glad I did. As I write this, the stock looks like its rolling over, and we could hit our profit target in the next few days.

This week’s profit opportunity comes from an industry that’s going to be deeply impacted by stubborn inflation and the Federal Reserve’s determination to keep rates higher for longer – auto sales.

Vehicle prices are still elevated even after a bit of a cooling off period, and it’s begun to impact sales as consumers opt out of high financing costs. This is bound to have a domino effect if it continues, and given that interest rates aren’t coming down any time soon, I’m certain that it will.

Fewer sales means that automobile production is also going to slow down, which will directly impact manufacturers and providers of car parts and technology solutions.

And there’s one particular company, based out of Ireland, that’s set up for a fast fall. Which means we’ve got another opportunity to make a quick profit.

The stock we want to target here is APTV plc (APTV), which provides electronics and safety-related equipment to retail automotive and commercial vehicle markets.

Long before the impacts from depressed auto sales and slowed production show up in APTV’s earnings, the market will price in the slowdown and the stock could trade lower.

We’re already starting to see the beginning of what could be a notable selloff.

The stock just broke below its 7-day moving average of $118.28. From here, I see it trading down to recent support at $111.50. If it breaks through there, I could see it trading down to the 50-day moving average at $103.82.

I like buying the APTV April 21, 2023 $120/$115 Put Spread for $2.25 or less. Only target this trade if you can fill it today. Capture profits at 50% and exit the trade if the spread is down 50%.

That’s it! Nice and simple. Check back in next week for another profit opportunity.

— Shah Gilani

Source: Total Wealth