DailyPlay – Opening Trade (CSCO) – November 30, 2023

CSCO Bullish Opening Trade Signal

View CSCO Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 14 Contracts Jan 19th $47.50 Calls @ $1.46 Debit per contract.

Total Risk: This trade has a max risk of $2,044 (14 Contract x $146) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $146 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is oversold and expected to bounce higher.

1M/6M Trends: Bearish/Bearish

Relative Strength: 3/10

OptionsPlay Score: 99

Stop Loss: @ $0.73 Credit. (50% loss to the premium paid)

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 Wednesday’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

CSCO had a sharp selloff recently and found support at the $48 mark, which is a long-term area of support. A bullish technical view as well as positive news coming from CSCO could drive price higher as it launched new business metrics for managing modern applications on Amazon Web Services.

CSCO currently trades at 12x forward earnings which is quite inexpensive. We will, therefore, look to Buy the Jan 19 $47.50 Calls @ $1.46 Debit per Contract. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 14 Contracts for a risk of $2,044 We will set a stop loss on this spread at around 50% of the premium paid @ $0.73 Credit.

CSCO – Daily