DailyPlay – Conditional Opening Trade (QQQ) – November 21, 2022

QQQ Conditional Bullish Opening Trades

View QQQ Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 2 Contracts Dec. 16th $272/$292 Call Vertical Spreads @ $11.82 Debit.

Total Risk: This trade has a max risk of $2,364 (2 Contracts x $1,182).

Trend Continuation Signal: This is a Bullish trade on a stock that is experiencing a neutral to bullish trend.

1M/6M Trends: Bullish/Neutral

Technical Score: 5/10

OptionsPlay Score: 85

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that this is a CONDITIONAL trade. We will only enter the trade when the condition is met, which is IF between today and Wednesday the Qs sell down to within 25 cents on either side of $273.22. Also note that the cost basis, premium paid, as well as the number of contracts when we open this trade will therefore be different from what we post today. This condition is only valid until Wednesday this week.

Investment Rationale

I’m clearly no bull, but I don’t mind tactically playing the long side if a name pulls back to where I’d be a willing buyer. So, let’s look at the daily QQQ chart, which last week stalled against one of two downtrend lines that can be drawn from the all-time high.

QQQ – Daily

Note the bearish Propulsion Momentum level is at $273.22 this week. Thus, if between today and Wednesday the Qs sell down to within 25 cents on either side of that number, we’ll then look to buy a Dec. 16th $272/$292 call spread for the then-current bid/offer mid-price.