DailyPlay – Partial Closing Trades (OIH, UNG, CAH) – May 31, 2023

Partial Closing Trades

• OIH – 23.86% Loss: Buy to Close 1 Contract (or 1/3 of your Contracts) June 16th $265/$255 Put Vertical Spreads @ $5.45 Debit. DailyPlay Portfolio: By Closing 1 of the 3 Contracts, we will pay $545.
• UNG – 52.38% Loss: Sell to Close 22 Contracts (or 50% of your Contracts) June 30th $7/$8.50 Call Vertical Spreads @ $0.20 Credit. DailyPlay Portfolio: By Closing 22 of the 45 Contracts, we will receive $440.
• CAH – 64.29% Gain: Sell to Close 5 Contracts (or 50% of your Contracts) July 21st $82.50 Puts @ $3.45 Credit. DailyPlay Portfolio: By Closing 5 of the 10 Contracts, we will receive $1,725.

Investment Rationale

The broad market was flat yesterday, but tech continued to plow ahead with the QQQ adding another 45 bps. of performance. Interestingly, though, NVDA gapped well higher but closed beneath its open after running as high as $420. (I actually see daily and weekly +13 signals in it and looking more in-depth into the name after briefly talking about it in yesterday’s weekly Technical Outlook, the $417 level was an upside target that’s been in place on the monthly chart since the late-2018 decline pulled the stock down to $31. (So, no, I’m not buying it up here.)

Today is the last day of the month, so look for the first few days of June to potentially continue having some cyclical sectors seeing money taken out of them in favor of mega-cap tech. To me, some of those tech high-flyers could easily stall around current prices, but hell hath no fury like a scorned “missed the up move” investor who will now blindly buy the AI-related names, thinking they have an edge in doing so.

Looking at our portfolio, let’s lower some of the bullish bets in the energy space that haven’t worked yet. So, let’s take off 1 of 3 OIH short put spreads, and let’s reduce 22 of 45 UNG long call spreads. Both could be affected by the oil and Natgas inventory-related weekly data out on Thursday morning this week. (Usually, the oil inventory report comes out Wednesday mornings, but because of the Memorial Day holiday, it gets delayed this week until 11:00 am ET on Thursday – 30 minutes after the Natgas number is released.)

We are also long 10 CAH $82.5 puts, and with them up 64%, let’s take half off today to lock in some much-needed profit after a tough month of several losses.

CAH – Daily