DailyPlay – Opening Trade (WBA) – June 20, 2023

WBA Bullish Opening Trade Signal

View WBA Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 7 Contracts July 21st $30/$35 Call Vertical Spreads @ $2.79 Debit per contract.

Total Risk: This trade has a max risk of $1,953 (7 Contracts x $279) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $279 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has been bullish and is expected to continue higher.

1M/6M Trends: Bullish/Neutral

Technical Score: 2/10

OptionsPlay Score: 67

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 Friday’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

We head into a week that has investors both optimistic and concerned about the parallels to the 1999 tech lead rally. With the Nasdaq-100 touching $15250 resistance last week, all eyes are on Chairman Powell’s testimony on Wednesday and Thursday. Hints at further hikes could pour cold water on the rally. Overall, market breadth has continued to improve and provides confidence in the state of the current rally. Moreover, the AI stocks leading the market higher have little in common to the unprofitable, zero-revenue-driven hype from 1999. I believe that for investors concerned about the rally it’s better to take a neutral tone rather than outright bearish in the face of such strong bullish momentum. Looking at our DailyPlay portfolio, we have an opportunity to add to a winning position and raise our stops in WBA. We have confirmed the $30 lows and broken out above the $32 congestion zone on strong volume. We are now looking to ride this trend to our $35 target. I’m looking to commit another 2% of our overall portfolio to buy 7 more contracts of the July $30/35 Call Vertical @ $2.79 Debit and raise stops to our original breakeven price of $1.50. If we are successful in this adjustment, we can realize a maximum profit of $5,747 while losing only $903 if we are stopped out on all 19 contracts. 

This is a reminder of our DailyPlay mandate, which is focused on helping you become a profitable trader. The only path to profitability is to have your winners be larger than the losers. We show you how to achieve this by turning small winners into large winners while cutting losses quickly. 

WBA – Daily