PYPL Bullish Opening Trade Signal

Investment Rationale

After breaking out above its $70 resistance level while outperforming the S&P 500, PYPL has now consolidated above this resistance level and offers an opportunity to add some additional exposure of 2% to seek a larger win on this trade. 

PYPL – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 8 PYPL Oct 18th $70/$75 Call Vertical Spreads $2.64 Debit per Contract.

Total Risk: This trade has a max risk of $2,112 (8 Contracts x $264) based on a hypothetical $100,000 portfolio risking another 2%. We suggest using 2% of your portfolio value and divide it by $264 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue the bullish trend.

1M/6M Trends: Bullish/Bullish

Relative Strength: 9/10

OptionsPlay Score: 91

Stop Loss: @ $1.32 Credit (50% loss of premium)

View PYPL Trade

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. 

View PYPL Trade

DailyPlay Portfolio Review

Investment Rationale

Equity markets have responded positivity to the GDP numbers and the NVDA earnings, with the S&P now within spitting distance of the all-time highs. Investors will now turn to the labor market data next week to gauge the shape of overall economy. Consumer spending has been more resilient in 2024 that expected, however recent Fed data seems to show a cooling labor market, which could start to affect spending in the last quarter. We are going to take a pause from entering new positions and monitor our existing ones. 

Our Trades

CSCO – 49 DTE

Bullish Debit Spread – Breakout above its key $50 resistance level is constructive for a continuation towards our $52.50 upside targets. 

ETN – 21 DTE

Bearish Credit Spread – Testing $300 resistance, a breakout above would invalidate our trade thesis and warrant cutting losses on the trade. 

LULU – 28 DTE

Bullish Credit Spread – Earnings report pushed the stock above $270 and should flip this to a profitable trade today. 

MAR – 35 DTE

Bearish Credit Spread – Testing $234 resistance level, a breakout above would invalidate our trade thesis and warrant cutting losses on the trade. 

PYPL – 49 DTE

Bullish Debit Spread –  Positive momentum pushes PYPL towards our $75 target and look constructive for further upside. 

SHOP – 28 DTE

Bullish Credit Spread –  We’re looking for $72 support to hold and for SHOP to continue onto our $80 upside target. 

Closing Trade

• AMAT – 41.25% gain: Buy to Close 2 Contract (or 100% of your Contracts) Oct 4th $200/$220 Call Vertical Spreads @ $5.17 Debit. DailyPlay Portfolio:  By Closing both Contracts, we will pay $1,034. We initially opened this Contract on August 23 @ $8.80 Credit. Our gain, therefore, is $726.

Investment Rationale

After NVDA reported stronger than expected revenue and EPS numbers, the stock dropped about 7% after hours, but as of this morning has already pared some of those losses. Overall, the earnings report shows that demand for AI related hardware remains robust and expects that to continue into the 2nd half of this year. We are going to take this opportunity to close out our AMAT position that is currently up roughly 40% as equity markets respond positively to the report. 

DailyPlay Portfolio Review

Investment Rationale

With NVDA’s earnings due after the close today, there’s significant anticipation around whether the demand for AI-related hardware remains robust. We expect this report to have a significant impact on the overall direction of the market. NVDA has been at the forefront of the AI-driven market rally over the past 18 months, fueled by its leading position GPUs, essential for AI computation. However, as the market becomes increasingly sensitive to the enormous Capex required to sustain this growth, investors are seeking more clarity on when these investments will translate into substantial revenue. 

Our Trades

AMAT – 37 DTE

Bearish Credit Spread – AMAT broke below the $200 level which solidifies our bearish thesis on this trade.

CSCO – 51 DTE

Bullish Debit Spread – As CSCO is trading above the $50 mark, we expect to see the next target to be between $52.50 and $54.

ETN – 23 DTE

Bearish Credit Spread – Recent rejection off the $300 resistance is a good confirmation of our bearish thesis on this trade and further downside is expected to the $275 support level. 

LULU – 30 DTE

Bullish Credit Spread – LULU continues to grind higher with the next target of $295 and $320 to the upside. 

MAR – 37 DTE

Bearish Credit Spread – Continues to trade around an area of resistance of $225 from where a break lower is expected with the first downside target at $215.

PYPL – 51 DTE

Bullish Debit Spread –  Continues to consolidate above the $70 support level which supports our bullish thesis. 

SHOP – 30 DTE

Bullish Credit Spread –  Breakout above $70 remains constructive for our bullish thesis and our upside target remains at $80.

MAR Bearish Opening Trade Signal

Investment Rationale

The hotel industry is facing growing headwinds as consumer spending on travel and discretionary items begins to slow. MAR has already issued softer guidance for the second half of the year. Despite being a dominant player in the hospitality industry, Marriott’s high valuation raises concerns about its ability to sustain its current stock price. This environment creates an attractive opportunity to add bearish exposure to MAR. 

Technical Analysis

After breaking down below $230 support a few weeks ago, MAR has rallied back to this $230 resistance level and is now showing signs of further weakness. This is coupled with underperformance to the S&P 500 and momentum turning negative, which would target $213 initial targets to the downside with $180 extended targets. 

MAR – Daily

Fundamental Analysis

If we look at the business, MAR is trading at a significantly higher valuation relative to its industry peers, at 24x forward earnings versus an 18x average. Despite this premium valuation, the company’s growth metrics are in line or slightly below industry averages, with expected EPS growth of only 6% compared to the industry average of 19%. These metrics suggest that Marriott is modestly overvalued, particularly in an environment where growth prospects are more uncertain. 

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 4 MAR Oct 4th $225/$235 Call Vertical Spreads $4.45 Credit per Contract.

Total Risk: This trade has a max risk of $2,220 (4 Contracts x $555) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $555 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that made a lower high in a downtrend, and is expected to continue lower.

1M/6M Trends: Neutral/Bearish

Relative Strength: 3/10

OptionsPlay Score: 111

Stop Loss: @ $8.90 Debit (100% loss to the value of premium)

View MAR Trade

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 Monday’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. 

View MAR Trade

DailyPlay Portfolio Review

Investment Rationale

As equities rally back towards their all-time highs, bond markets and other asset classes are confirming a risk-on environment. All eyes are on NVDA earnings this week, as AI has lead this market higher over the past 18 months and investors are keeping a close eye on CapEx spending and its future expected revenue. Any surprises to NVDA chip demand will likely have a large affect on how equities perform going forward. We are taking this time to review our DailyPlay portfolio. 

Our Trades

AMAT – 39 DTE

Bearish Credit Spread – AMAT is pulling back from a recent lower high and a break below $200 will likely target support at $190.

CSCO – 53 DTE

Bullish Debit Spread – Following a break above $50 CSCO is continuing higher. The next key level is at around $54.

ETN – 25 DTE

Bearish Credit Spread – Resistance at $300 remains intact and a break lower is likely following, with the next area of support at around $275.

LULU – 32 DTE

Bullish Credit Spread – Following a bounce off support at $250 LULU continues to grind higher, likely targeting a key level at around $295.

PYPL – 53 DTE

Bullish Debit Spread –  We will keep a close eye on this trade as we see possible consolidation at this price level. A break above $73 is needed to warrant keeping this position.

SHOP – 32 DTE

Bullish Credit Spread –  SHOP remains in a strong bullish trend with the next key level being at $80.

AMAT Bearish Opening Trade Signal

Investment Rationale

AMAT is facing headwinds as the broader semiconductor sector faces mounting pressure. The AI-driven rally that previously bolstered semiconductor stocks appears to be losing momentum, with concerns about high valuations and potential supply chain disruptions. As a key player in semiconductor manufacturing equipment, AMAT is vulnerable to these sector-wide challenges. 

Technical Analysis

AMAT recently failed to break above the $215 resistance level, a critical area that has now been reaffirmed as resistance. The rejection at this level suggests that the stock’s upward momentum is slowing. The price action indicates a potential downside towards the $175 level, the next significant support. 

AMAT – Daily

Fundamental Analysis

While AMAT has strong profitability metrics, its growth rates are significant lower than the industry and the broader semiconductor industry is facing a potential headwind for the AI trade that had previously driven the sector’s gains. Trading at 23x forward earnings, AMAT’s valuation is risky given the growing uncertainties surrounding future revenues.

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 2 AMAT Oct 4th $200/$220 Call Vertical Spreads $8.07 Credit per Contract.

Total Risk: This trade has a max risk of $2,386 (2 Contracts x $1,193) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $1,193 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that made a lower high in a downtrend.

1M/6M Trends: Neutral/ Mildly Bearish

Relative Strength: 4/10

OptionsPlay Score: 106

Stop Loss: @ $16.14 Debit (100% loss to the value of premium)

View AMAT Trade

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. 

View AMAT Trade

Closing Trade

• LULU – 49.23% gain: Buy to Close 2 Contracts (or 100% of your Contracts) Sept 20th $240/$220 Put Vertical Spreads @ $3.96 Debit. DailyPlay Portfolio: By Closing both Contracts, we will pay $792. We opened these 2 Contracts on August 9 @ $8.12 Credit. The gain, therefore, is $832 which is almost 1% gain on our Portfolio. 

LULU Bullish Opening Trade Signal

Investment Rationale

As LULU trades higher on the back of better than expected consumer spending data, it has reached a take profit level. We are going to adjust this position by rolling it up and out to the Sept 27 $260/$240 Put Vertical @ $6.93 Credit. We are looking to continue this upward momentum and targeting $295 to the upside.

By Rolling LULU we will Close the initial trade and Open a new trade with different strikes and expiry date.

LULU – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 1 LULU Sept 27th $265/$240 Put Vertical Spread $9.46 Credit per Contract.

Total Risk: This trade has a max risk of $1,554 (1 Contract x $1,554) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $1,554 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is in a strong bullish trend and expected to continue higher.

1M/6M Trends: Mildly Bullish/Bearish

Relative Strength: 1/10

OptionsPlay Score: 89

Stop Loss: @ $18.92 Debit (100% loss to the value of premium)

View LULU Trade

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 Wednesday’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. 

View LULU Trade

CSCO Bullish Opening Trade Signal

Investment Rationale

As CSCO works through reinventing itself and shifting away from its core business of selling network hardware, there are some signs that investors are starting to pay attention. Despite revenues declining for the 3rd straight quarter and cost cutting, there are signs that brighter days are ahead for CSCO and worth considering for adding some bullish exposure. 

Technical Analysis

Having been on a downtrend since Sept of last year, CSCO’s recent gap higher has broken the bearish trendline. It recently gapped higher on earnings and is now starting to breakout above its $50 resistance level, which would open up $53 gap fill and $54 upside targets. 

CSCO – Daily

Fundamental Analysis

With its recent partnership with NVDA and focus on AI, CSCO’s shift into cybersecurity and software will allow it to trade a higher multiple. Currently at 20x forward earnings, its at a discount to its peer, due to its slower than expected growth, but that is expected to pickup over the next few quarters with margin expansion. This translates to some upside potential in its valuation. 

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 20 CSCO Oct 18th $50/$52.50 Call Vertical Spreads $1.01 Debit per Contract.

Total Risk: This trade has a max risk of $2,020 (20 Contracts x $101) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $101 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is in a strong bullish trend and expected to continue higher.

1M/6M Trends: Bullish/Bullish

Relative Strength: 7/10

OptionsPlay Score: 107

Stop Loss: @ $0.51 Debit (50% loss of premium)

View CSCO Trade

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 Tuesday’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. 

View CSCO Trade

PYPL Bullish Opening Trade Signal

Investment Rationale

We have taken a bullish stance on PYPL since April, and taking profits on trades earlier this month on earnings. PYPL has now triggered another bullish signal for a massive breakout higher and presents another buying opportunity for investors.

Technical Analysis

PYPL has formed a bottoming formation between $55 and $68 for the past year and just broke out above the $68 resistance level yesterday. Additionally, it has outperformed the market over the past 2 months on the breakout which is a good confirmation signal for the breakout.

PYPL – Daily

Fundamental Analysis

PYPL trades at 15x forward earnings, a 25% discount to the market despite averaging nearly 15% EPS growth over the past few years and improving operating margins of over 16%. Especially when analysts expect 13% EPS growth over the next few years. With very little debt and strong cash flows, the risks are low investing in PYPL at these valuations and reflect significant upside potential.

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 11 PYPL Oct 18th $70/$75 Call Vertical Spreads $1.83 Debit per Contract.

Total Risk: This trade has a max risk of $2,013 (11 Contracts x $183) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $183 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that bounced off support and is in a strong bullish trend.

1M/6M Trends: Bullish/Bullish

Relative Strength: 9/10

OptionsPlay Score: 103

Stop Loss: @ $0.92 Credit (50% loss of premium)

View PYPL Trade

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 Monday’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. 

View PYPL Trade