View Closing Trades

Closing Trades

• DPZ – 47% Gain: Short Dec 17, 2021 460/490 Put Verticals @ $5.40 Debit

Adjustment Trade

C Trade Adjustment – 53% Unrealized Loss. Roll November 19, $73 Call to December 17, $72.5 Call to collect more premium:

• Buy to close November 19 $73 Call @ $0.08 Debit
• Sell to open December 17 $72.5 Call @ $0.82 Credit
• This results in a reduced cost basis for the C Call Diagonal Trade from $3.25 to $2.51. 

DailyPlay Positions Outlook:

After a 4 week run in the S&P 500 gaining more than 1% each week, equities have started to pullback slightly after high inflation numbers were released earlier this week. While our outlook remains bullish for equities due to strong technicals and fundamentals, the pullback from overbought conditions provides an opportunity for a better entry for the major indices. We are taking this opportunity to take profits on our DPZ bullish position to avoid weekend risk as it is very close to its TP price and we are also adjusting our C trade. The rolling of the short strike for C allows for a reduced cost basis for the overall trade 

Prakash Vijayanath
Analyst at OptionsPlay

View CCI Trade

The bullish DailyPlay for Wednesday, November 10th is Crown Castle International (CCI). CCI is part of the Real Estate sector that has experienced an 8.3% gain in the last month. 

Technical View

• Pullback to 21 D EMA and bounce is constructive for continuation higher.
• Improving Technical Score
• Bullish 1M trend.

Fundamental View

• Well positioned to leverage growing wireless network development spend
• Core leasing network expected to grow by 50% in 2022
• Earnings Jan 26, 2022 (76 days)

As this is a credit spread, look to take profits at 50% gain and cut losses at 100%:

• Take Profits: $1.67 Debit
• Stop Loss: $7.70 Debit

View CCI Trade

View CHTR Trade

The bearish DailyPlay for Tuesday, November 9th is Charter Communications (CHTR). CHTR is part of the communications sector which is currently the weakest sector in the S&P 500. 

Technical View

• Strong bearish trend. Price broke below and retested $700 resistance providing a good bearish entry.
• Weak Technical Score (3 out of 10).
• Bearish 1M and 6M trends.

Fundamental View

• Lower broadband usage and 15% decrease in advertising revenue (vs -8.9% expected)
• Slowing EPS and revenue growth
• Earnings Jan 28 (80 days)

As this is a credit spread, look to take profits at 50% gain and cut losses at 100%:

• Take Profits: $6.10 Debit
• Stop Loss: $24.40 Debit

View CHTR Trade

Closing Trades

• PDD– 53% Gain: Short Dec 3, 2021 93/104 Call Vertical @ $1.85 Debit

After some consolidation, PDD broke down lower towards the end of last week and managed to break below the $84 minor support level. This move meant that PDD reached our take profit level and with only 25 days to expiration, we take this opportunity to close this trade for a 53% profit. 

Prakash Vijayanath
Analyst at OptionsPlay

View MGM Trade

Market Outlook:

Equities ended the week on a positive note with SPY and QQQ reaching new all-time highs and pulling back slightly. For the first time this year, small caps started to show signs of participating in the rally experienced by the large-cap names with the Russell 2000 breaking out of a year-long consolidation range with strong momentum. This is very encouraging for equities and indicates broadening participation. The highlight of last week was the 2 day Fed meeting where equities reacted positively to the announcement on monetary tapering. The key events to watch this week will be further earnings announcements and inflation data which will provide some guidance as to what the Fed will do at their next meeting.

MGM Bullish Trade Idea:
Our bullish trade idea today is MGM Resorts International (MGM). MGM is part of the Consumer Discretionary sector which is the strongest sector currently and is providing leadership for the current equity rally. MGM’s technicals are very encouraging as it has been outperforming the Dow Jones Gambling Index for multiple months. Price has recently broken above its short-term consolidation range and with a strong recovery in Q3 EPS and Revenues, MGM’s technicals and fundamentals are aligning for a move higher. 

As this is a credit spread, look to take profits at 50% gain and cut losses at 100%:

• Take Profit: $0.58 Debit
• Stop Loss: $2.34 Debit

View MGM Trade

Closing Trades 

• COST – 164% Loss: Short Nov 26, 2021 $455/$470 Call Vertical​  @ $14.80 Debit

View XPEV Trade

The bullish DailyPlay for Friday, November 5th is Xpeng Inc (XPEV). XPEV is part of the Consumer Discretionary sector which has provided strong leadership in recent weeks and has gained 16.20% in the last month. Please note that XPEV will report earnings later this month.  

Technical View

• Break above $45 resistance and consolidation provides a good bullish entry point. 
• Very strong technical score (10 out of 10)
• Bullish 1M and 6M trends

Fundamental View

• 233% YoY delivery growth reported in October  
• Expected to post the strongest growth among Chinese EV makers in Q4 due to model cycle. 
• Earnings November 23 (19 days). 

As this is a Debit Spread, look to take profits at 75%-100% and cut losses at 50%:

• Take Profit: $8.14 – $9.30 Credit
• Stop Loss: $2.32 Credit

View XPEV Trade

View TAN Trade

The bullish DailyPlay for Thursday, November 4th is the Invesco Solar ETF (TAN). TAN’s top 10 holdings are a variety of solar-based technology companies that offer broad-based exposure to the solar industry. 

Technical View

• Strong breakout of the $93 previous resistance level. Price has pulled back and bounced higher from this level. 
• Very Strong Technical Score (10 out of 10).
• Bullish 1M and 6M trends.

Fundamental View

• Strong MSCI ESG rating.
• The majority of TAN’s holdings are currently undervalued. 
• Broad-based exposure allows for lower volatility during earnings season

As this is a debit spread, look to take profits at 75%-100% gain and cut losses at 50%:

• Take Profits: $10.68 – $12.20 Credit
• Stop Loss: $3.05 Credit

View TAN Trade

Taking Profits

We expect some market volatility today with the Fed concluding their 2-day meeting which will likely highlight a tapering in monetary policy and the plan for rate hikes in 2022. While markets have priced in at least 1 rate hike for 2022, the downside risk for equities is if the Fed indicates more than just 1 rate hike. 

• FB – 34% Gain: Short Nov 19, 2021 $300/$322.5 Call Vertical​  @ $5.11 Debit

View TLT Trade

The bearish DailyPlay for Wednesday, November 3rd is the 20+ Year Treasury Bond ETF (TLT). TLT has experienced a 1.46% gain in the last month.

Technical View

• Price rallied back above the $146 resistance level but poor momentum indicates downside. 
• Declining technical score (6 out of 10)
• Price rejecting 100 D MA.

Fundamental View

• Very high probability of monetary tapering to be confirmed by the Fed.  
• Several participants preferred raising interest rates faster than market anticipated timelines
• Inflation metrics continue to outpace initial forecasts. 

As this is a Credit Spread, look to take profits at 50% and cut losses at 100%:

• Take Profit: $0.77 Debit
• Stop Loss: $3.06 Debit

View TLT Trade