QQQ Bullish Opening Trade Signal – Feb 9, 2022

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy Feb 28, 2022 $370/$380 Call Vertical @ $2.09 Debit Limit Order

Counter Trend Signal: This is a bullish strategy on a ETF that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 6/10

OptionsPlay Score: 99

View QQQ Trade

Entering the Trade

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

Investment Rationale

With the QQQ having made 4 consecutive daily lows against its cloud model’s Conversion Line (in pink), we’re going to play for a move up to test last week’s high near the Base Line (in orange), where there should be some short-term resistance. The cloud’s Lagging Line (in bold blue) is nothing more than the current price displayed 26 days in the past, so that blue line tracks wherever the QQQ is trading in real-time. That Lagging Line should face resistance when/if it rallies up to its cloud bottom at $380 anytime in the next three weeks. Therefore, we will buy a Feb. 28 $370/$380 call spread. When price hits its Base Line (currently $359.12), we will unwind half the debit spread. Our sell-stop will be any day (or two days; your choice) that now closes beneath last Friday’s low of $351.97.