DailyPlay – Allstate Corp (ALL) – March 25, 2022

View ALL Trade

Strategy Details

Strategy: Call Credit Spread

Strategy Direction: Bearish

Details: Sell to open May 20, 2022 $140/$145 Call Vertical @ $2.20 Credit. We recommend opening a half position in ALL. For example, if you usually open 10 contracts for a trade, we recommend only opening 5 contracts for this one. 

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

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 112

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

Like most other stocks, this has rallied sharply over the past two weeks. Now it finds itself against its all-time highs while marking a Setup +9 count. It wouldn’t surprise me if we see some consolidation starting shortly. With ALL’s next quarterly earnings report not due out until May 4, there’s no major bullish fundamental catalyst at play for almost six more weeks. As such, we will sell this call vertical here, looking for a price pullback/consolidation over the next few weeks. We’ll likely cover this short idea on a stock pullback to near $132.