DailyPlay – Opening Trade (RSP) – June 6, 2023

RSP Bullish Opening Trade Signal

View RSP Trade

Strategy Details

Strategy: Long Stock

Direction: Bullish

Details: Buy 14 RSP @ $143 Debit per Share.

Total Risk: This trade has a max risk of $2,001.93 (14 Contracts x $142.99) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $142.99 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is in a bullish trend and is expected to break out higher.

1M/6M Trends: Bullish/Bullish

Technical Score: 5/10

OptionsPlay Score: 125

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

Today’s price action in the markets left a lot to be desired. My biggest concern with our current breakout higher in the S&P above its key $4200 level is the lack of breadth. About 10 stocks are dragging the entire “market” higher while the rest of the market is flat. This type of extreme can only resolve itself in one of two possible ways. Either the AI tech stocks that are dragging the markets higher retrace, which would likely see the S&P 500 retest $3800, or the rest of the market starts to play catchup and the S&P continues this new bullish trend. Despite the economic headwinds, markets can stay irrational longer than you can stay solvent. At the moment, the bulls have more control so I’m going to take this opportunity to add to our position that was established last week, by adding to our RSP position by purchasing another 14 shares (for a hypothetical $100,000 portfolio). This would allow us to potentially profit if the broader market catches up with the AI stocks. 

RSP – Daily