DailyPlay – Opening Trade ( MDT) – April 14, 2023

MDT Bullish Opening Trade Signal

View MDT Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 10 Contracts May 19th $82.50 Calls @ $1.88 Debit per contract.

Total Risk: This trade has a max risk of $1,880 (10 Contracts x $188) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $188 to select the # contracts for your portfolio.

Trend Continuation Signal: This stock has recently turned bullish and a continued bounce higher is expected.

1M/6M Trends: Bullish/Mildly Bullish

Technical Score: 5/10

OptionsPlay Score: 76

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 Thursday’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

With better-than-expected PPI numbers yesterday, the SPX surged higher and is now playing with a potential qualified upside breakout on a close above 4155 today. That level is 7 points above the bullish Propulsion Momentum level, as well as being the top of the weekly cloud. Doing so would set up next week to confirm the move, which would start by needing to see a higher open on Monday/a higher intra-week high sometime next week vs. this week’s high/and a Friday close next week above today’s close. Seeing that ups the odds for a move to fill the gap just north of 4200, and could then potentially get more follow-through buying as shorts get squeezed out (simply adding to the buying scenario).

With yesterday seeing PLNT up on the day going into the close, we did NOT enter Thursday’s Daily Play trade. The idea is canceled.

Here’s a new idea for today: Let’s get long the Medtronic (MDT) May 19th $82.5 call, which went out at $1.88 last night. (Based on the chart below, I would have bought the $82.5/$92.5 call spread, but selling that $92.5 only takes in 4 cents. It’s not worth it to cap the trade for that.) So, let’s just buy the call, given the trend line breakout against multiple prior lows.

MDT – Weekly

You know that I don’t like buying calls on a Friday, but if the SPX moves higher tomorrow, then I think it pays to lose the theta over the weekend and get long today.