DailyPlay – Closing Trade (ABBV) – January 24, 2023

Closing Trade

• ABBV – 139.43% Gain: Sell to Close 1 Contract (or the remainder of your positions) Feb 17th $160/$145 Put Vertical Spreads @ $9.17 Credit. DailyPlay Portfolio: By Closing the remaining 1 Contract, we will be receiving $917. We took partial profit on this trade on Jan 13 when we Closed 3 Contracts at @6.68 Credit per Contract and then again on Jan 17 when we Closed 1 Contract at $6.28 Credit. Our average cost to exit this trade is therefore $7.10 Credit per Contract, and our average gain on this trade is 85.33%.

Investment Rationale

Stocks finally got the lift that bulls have been hoping for, pushing up and through the SPX’s major downtrend line from all-time highs. This is a good thing for longs and the general tactical bullish call we’ve had this year.  Does it have more to go? Very possibly, BUT, the Fed rate hike and press conference on 2/1 could very possibly change the game, especially if the market continues to rally from now till then. Remember: The Fed does NOT want to see asset prices rallying while they are demonstrably trying to cool inflation. The higher stocks now go, the more likely we hear even more hawkish words from Jay Powell and gang on Feb. 1. (They are in their quiet period now so you will not hear anything between now and the rate announcement.)

We’re still long one ABBV Feb 17th $160/$145 put spread that we’ve played very well. Any daily close that’s now above the close from four days prior (so today, if above $149.20, last Wednesday’s close) going into the close, we will exit the remaining position. The stock has made a daily Setup -9 count right at its daily Propulsion Exhaustion level.

ABBV – Daily