DailyPlay – Opening Trade (BIIB) – Partial Closing Trade (COPX) – June 28, 2022

Bullish Opening Trade Signal

View BIIB Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 6 Contracts July 15, 2022 $215/$225 Call Verticals @ $3.30 Debit.

Total Risk: This trade has a max risk of $1,980 (6 Contracts x $330 per contract).

Trend Continuation Signal: This is a Bullish trade on a stock that is experiencing a bullish trend. 

1M/6M Trends: Bullish/Neutral

Technical Score: 8/10

OptionsPlay Score: 109

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. 

Please note these prices are based on the previous day’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. This will be reflected in the Portfolio tab within the OptionsPlay platform.

Investment Rationale

Health Care has been one of my pure Over Weights this year in my In The Know Trader’s monthly 7:11 report. In fact, I put it in the portfolio on Dec. 1st last year after having not been in the sector since its inception in August 2020. This year, it is already outpacing the SPY by 10.3%.

Within the Health Care sector is biotechnology, and one of that group’s best-known names is Biogen (BIIB). And BIIB did something yesterday it has not done even once since the June 2021 peak in price: its daily cloud’s Lagging Line broke above the top of its cloud. That is deemed a bullish breakout in cloud chart terms, and as such, we will look to buy a short-dated July 15th $215/$225 call spread. It closed yesterday at $3.25 mid, meaning that we’ll be laying out about 33% of the spread differential.

BIIB – Daily

Secondly, to best manage risk, I want to revisit a very recent Daily Play short recommendation in COPX. We are short a July 15th $31/$35 call spread from last week when copper broke down to new 17-month lows while also having its Lagging Line break its cloud. However, by last Friday’s close, copper rallied enough to just keep the Lagging Line in its cloud, and thus, this chart really didn’t break down. As such, I’d rather cover half now than run the risk that it doesn’t break at all. If it does, we still have half on. But if not, we’ve reduced the chances for a full loss.

COPX – Weekly

Partial Closing Trade

• COPX – 88.17% Loss: Buy to Close 3 Contracts July 15, 2022 $31/$35 Call Verticals @ $1.75 Debit. DailyPlay Portfolio: By Closing 3 of the 6 Contracts, we will be paying $525.