DailyPlay – Closing Trade (XLF) Opening Trade (CWRD) – February 14, 2023

Closing Trade

• XLF – 74.50% Loss: Sell to Close 7 Contracts (or 50% of your Contracts) Mar 3rd $35.5/$32.5 Put Vertical Spreads @ $0.17 Credit per contract.DailyPlay Portfolio: By Closing 7 of the remaining 14 Contracts, we will be receiving $119.

CRWD Bullish Opening Trade Signal

View CRWD Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 1 Contract Mar 10th $94/$130 Call Vertical Spread @ $17.81 Debit per contract.

Total Risk: his trade has a max risk of $1,781 (1 Contract x $1,781).

Trend Continuation Signal: This is a bullish trade on a stock that has recently turned bullish.

1M/6M Trends: Bullish/Neutral

Technical Score: 2/10

OptionsPlay Score: 94

Entering the Trade

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

Please note that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

Investment Rationale

Stocks rallied ahead of today’s key CPI report (out an hour before the NYSE opens), so we’ll at least see investors’ initial reaction to the number based on how the futures trade right after 8:30am ET. The consensus Y-O-Y inflation rate is expected to be 6.2%, with core inflation expected to be 5.5%. Bulls expect these numbers to come in as expected or better, but if they are higher, look for an immediate decline that I’d expect to continue down several percent over the balance of the week. I’ll focus on where the SPX is on Friday’s close: above 4148 will likely lead to a higher market over the next several weeks; lower than 4148 keeps me thinking the market is heading lower in the near term.

As per open positions, if today’s CPI pushes stocks higher, then we have to lower our bearish exposure on the long XLF March 3rd $35.5/$32.5 put spread we have on by removing half of the 14 spreads we have remaining.

XLF – Daily

For a new trade idea, I do like the very badly beaten-down name, CrowdStrike Holdings (CRWD). This sold off some 70% from its all-time high, and is considered one of the premier cybersecurity names out there.

CRWD – Daily

Let’s look to buy a position in the March 10th $94/$130 call spread (It closed yesterday at $17.81 mid).

Your only choice to make is whether or not to put this on in relation to the CPI number and whether you think the overall market is now headed higher or not.