Today transports broke key support and I’m looking for downside moves to the 127.2% and 161.8% of the recent swing. If it feels “too late” to add long puts here, and you don’t want to potentially miss the move waiting for a rally to short, here is a low cost, high reward butterfly that can be taken today.
I have picked ARQL for the trade of the week, as I see it coming into strong moving average support on several time frames. Adding to the conviction that price is ready to go up, ARQL has also formed a larger double bottom with Moxie Indicator positive divergence. I even show other tickers that had similar setups in the recent past so we can examine how they move.
Bearish Butterfly in TWLO, looking for 95 on the downside. Here is the set up: BUY +10 BUTTERFLY TWLO 100 (Weeklys) 6 DEC 19 100/95/90 PUT @.83 LMT.
I like the setup on DD weekly. Looking for a pullback to the averages first, then I would like to setup a 75/70 put credit spread with a target of $76 on the stock.
I chose to focus on the gift that keeps on giving for me, and that’s the XLU and NEE. I also show how the VScore helps me confirm the pullback buys for both these markets that I have bullish directional bias in. XLU behaves as a bond proxy and the pullback here to 63 would be where I price the ATM Calls with ideally 45 to 60 days to expiration. The heaviest weighted name in XLU is NEE. NEE is in a nice smooth uptrend and I will “go wide not deep” by putting a small position on in each. For NEE I am pricing the 230 Calls for the Dec 20 expiration, but only as price action reaches my zone, which is 231 to 228.
Long Straddle in AMZN — The long straddle in Amazon is going to be an expensive position to put on but should hold its value as we head into earnings. The profit comes if we can catch a rise in implied volatility, but I will not hold this through the report.
I’ve had a bearish bias in ATVI ever since rejecting that Voodoo Fireline from the beginning of last week. Fast forward to today and we still have consistent shorting. On top of that, ATVI is forming a Squeeze for the second day in a row, and so I’d like to think that the rest of the longs are getting the last chance to hop off the boat. I have a conservative downwards target of $52.60 heading into November 7th earnings. So, I’d like to define my risk and pin a butterfly heading into earning at $53.00.
For this week, I’m looking for this rally back to the daily 21 EMA on the SPY as a rejection point, and for the SPY to roll over and potentially retest last week’s lows. To play this potential move, I’m setting up the following low risk, high reward bearish butterfly.
I have a bullish setup in LULU and it has already triggered an entry on some time frames.