DailyPlay – Opening Trade (BA) – June 14, 2023

BA Bullish Opening Trade Signal

View BA Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 3 Contracts Aug 18th $225/$250 Call Vertical Spreads @ $7.42 Debit per contract.

Total Risk: This trade has a max risk of $2,226 (3 Contracts x $742) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $742 to select the # shares for your portfolio.

Trend Continuation Signal: This stock broke above a key level, and is expected to continue its bullish trend.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 109

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 Tuesday’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 further solidifies what we laid out at the beginning of the week. We saw the rest of the market play catchup to the Tech rally. RSP (equal weight S&P) outperformed both SPY and QQQ, which confirms the improving market breadth. This provides further conviction behind the bullish trend in equities and confirms our positioning to be long equities. Yesterday’s CPI print cements a rate pause by the Fed. There is a growing consensus that the Fed can pause going forward, despite not yet reaching its 2% inflation target. The downside risk is that the Fed pushes on with more rate hikes to bring inflation down to its 2% target given the strength of the US economy and labor market. And one sector that has started to show relative strength has been Industrials and Boeing (BA) just broke out of a 6 month trading range between $200 and $215. While Boeing has more issues to sort through in its multi-year turnaround, price action is starting to look positive and has the potential to continue higher. Look to Buy Aug $225/$250 Call Vertical @ $7.42 Debit, risking 3.3% of the stock’s value to position for a breakout higher. 

BA – Daily