AAPL Bearish Opening Trade Signal

View AAPL Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 5 Contracts Dec 15th $170/$155 Put Vertical Spreads @ $3.94 Debit per contract.

Total Risk: This trade has a max risk of $1,970 (5 Contracts x $394) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $394 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is in a bearish trend and is expected to continue lower.

1M/6M Trends: Bearish/ Mildly Bearish

Relative Strength: 7/10

OptionsPlay Score: 145

Stop Loss: @ $2.00 Credit (50% loss of premium paid).

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. 

Investment Rationale

With the S&P 500 firmly below the $4330 support level and 10-year yields now within spitting distance of 5%, the only market hanging on is the Nasdaq-100. I see risks building that the Nasdaq and big tech will break its support level at risk of a major pullback. We reduced our exposure last week on AAPL with the concern that markets were at a crossroads and could potentially rally in the short run. Those odds are reduced at this point and I’m advocating that we add bearish exposure in AAPL again to our portfolio. This time buying downside exposure in the form of a put spread into year end. Buy Dec $170/$155 Put Vertical @ $3.94 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 5 Contracts for a risk of $1,970. We will set a stop loss on the put spread at around 50% of the premium paid @ $2.00 Credit.

AAPL – Daily

XOM Bullish Opening Trade Signal

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Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 5 Contracts Nov 17th $115/$125 Call Vertical Spreads @ $3.69 Debit per contract.

Total Risk: This trade has a max risk of $1,845 (5 Contracts x $369) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $369 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to break out higher.

1M/6M Trends: Neutral/Bullish

Technical Score: 8/10

OptionsPlay Score: 105

Stop Loss: @ $2.00 Credit (50% loss).

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. 

Investment Rationale

A recent pullback in oil prices has presented an opportunity to seek long exposure in energy stocks where the risk/reward ratio is more favorable. XOM currently is knocking on an all-time high triple top of $120 and the recent pullback to its 21D moving average of $155 provides an entry point to play for a potential breakout higher. With oil prices finding support around the $88 level, look for energy stocks to also find stabilization at these levels and potentially start trading higher if oil prices continue to spike. I’m looking to buy the Nov $115/$125 Call Vertical @ $3.69 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 5 Contracts for a risk of $1,975. We will set a stop loss on the put spread at around 50% of the premium paid @ $2.00 Credit.

XOM – Daily

MSTF Bearish Opening Trade Signal

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Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 2 Contracts Nov 17th $320/$340 Call Vertical Spreads @ $7.30 Credit per contract.

Total Risk: This trade has a max risk of $2,540 (2 Contracts x $1,270) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $1,270 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is in a bearish trend.

1M/6M Trends: Bearish/Neutral

Technical Score: 8/10

OptionsPlay Score: 102

Stop Loss: @ $14.60 Debit (100% loss).

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

Markets are breathing a sigh of relief after a government shutdown was averted over the weekend and futures markets are rallying as a result. However, equities remain currently below major support levels and requires a decisive rally to break back above them to maintain a neutral view. Our base case remains that rallies are opportunities to sell into and establish new bearish positions. With 10-year rates now pushing 4.6%, high-valuation stocks that have seen strong multiple expansion without strong revenue and EPS growth are at risk of pulling back. Especially ones that rallied on the back of the AI hype.

MSFT sits at the intersection of this crossroad and recently broke below a major support at $320 with elevated implied volatilities. I’m looking to establish a neutral/bearish trade by selling the Nov $320/$340 Call Vertical @ $7.30 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 2 Contracts for a risk of $2,540. We will set a stop loss on the put spread at 100% of the premium collected @ $14.60 Debit.

MSFT – Daily

Closing Trade

• TXN – 33.28% Gain: Sell to Close 9 Contracts (or 100% of your Contracts) Oct 20th $165/$150 Put Vertical Spreads @ $6.51 Credit. DailyPlay Portfolio: By Closing all 9 Contracts, we will receive $5,859. We initially opened 5 Contracts on Sept 13 @ $4.08 Debit and then on another 4 Contracts on Sept 26 @ $5.89 Debit. Our average gain, therefore, is $163 per contract.

Investment Rationale

The underlying market continues to be driven by bonds, as 10-year yields hit a new 10-year high we continue to target 5.2% to the upside. In this environment, we are bearish on equities, however markets are quite oversold and showing signs of exhaustion on this selloff. This increases the probability of a bounce from here and we are going to take this opportunity to reduce some bearish exposure and take profits. If markets bounce we will look to add to bearish exposure where the risk/reward is more favorable. Look to take profits on the full TXN position as price action is showing exhaustion to the downside. 

CRWD Bullish Opening Trade Signal

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Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 3 Contracts Nov 3rd $160/$150 Put Vertical Spreads @ $3.73 Credit per contract.tract.

Total Risk: This trade has a max risk of $1,881 (3 Contracts x $627) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $627 to select the # shares for your portfolio.

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

1M/6M Trends: Neutral/Bullish

Technical Score: 10/10

OptionsPlay Score: 90

Stop Loss: @ $7.50 Debit (100% loss).

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. 

Investment Rationale

The bond market selloff has started to reach oversold and exhausted levels that suggest we are in for a bounce. The question is how far? With 10-year yields now firmly above 4.3%, in my opinion, we may see a shallow bounce in equities and bonds, but the economic headwinds remain. Higher oil prices are denting consumer confidence, and higher rates are pushing equity valuations lower. The real risk is if the bond market has to reprice its current expectations of rate cuts by next year. In that scenario, equity markets will have to sell off further to account for higher rates for longer. While I expect a bounce over the next few trading sessions, I believe that bounce is an opportunity to seek further downside exposure rather than a buying opportunity.

To play for a short-term tactical bounce, I’m choosing to favor profitable, high-margin momentum plays such as CRWD. Cybersecurity remains one of the fastest-growing industries within software as geopolitical tensions rise. With its recent pullback to its $160 support level, I’m looking to sell the Nov 3 $160/$150 Put Vertical @ $3.73 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 3 Contracts for a risk of $1,881. We will set a stop loss on the put spread at 100% of the premium collected @ $7.50 Debit.

CRWD – Daily

TXN Bearish Opening Trade Signal

View TXN Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 4 Contracts Oct 20th $165/$150 Put Vertical Spreads @ $5.02 Debit per contract.

Total Risk: This trade has a max risk of $2,008 (4 Contracts x $502) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $502 to select the # shares for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that broke below an area of support.

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 130

Stop Loss: @ $2.50 Credit (50% loss).

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. 

Investment Rationale

As 10-year yields continue to climb to decade highs, stocks with rich valuations are at the highest risk of a pullback as equities weaken. One of our positions TXN has now broken below it major support level of $160 and at risk of reversing lower toward its $144 52-week lows. We are going to take this opportunity now to add further exposure to the TXN position. We have already taken profits on our initial position and currently own the Oct $165/$150 Put Vertical and suggest that we add another 2% of our portfolio risk to this position. With a hypothetical portfolio of $100,000, 2% of the portfolio’s value would equate to 4 more Contracts. We will set a stop loss on the put spread at 50% of the premium paid @ $2.50 Credit. 

Closing Trade

• KEY – 55.12% Loss: Sell to Close 16 Contracts  (or 100% of your Contracts) Nov 17th $11 Calls @ $0.57 Credit. DailyPlay Portfolio: By Closing all 16 Contracts, we will receive $912. We initially opened these 16 Contracts on September 18 @ $1.28 Debit. Our average loss, therefore, is $71 per contract.

RCL Bearish Opening Trade Signal

View RCL Trade

Strategy Details

Strategy: ong Put Vertical Spread

Direction: Bearish

Details: Buy to Open 5 Contracts Nov 17th $90/$75 Put Vertical Spreads @ $4.07 Debit per contract.

Total Risk: This trade has a max risk of $2,035 (5 Contracts x $407) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $407 to select the # shares for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that has reached a point of exhaustion and is expected to continue lower.

1M/6M Trends: Bearish/Neutral

Technical Score: 10/10

OptionsPlay Score: 136

Stop Loss: @ $2.00 Credit (50% loss).

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

With the S&P 500 closing at its lowest level in over 2 months, it is at risk of completing a topping formation that puts $4100 to the downside in our sights. This week represents an important week for bulls to take control of not only equities but also bonds. With the 10-year yields breaking out above the 4.3% double top puts equity valuations into question. If we see yields remain elevated above 4.3%, the S&P will likely be pressured lower below its key $4300 level towards $4100. We need to manage positions in our portfolio by closing out the full position in KEY, after hitting our stop loss level.

At the same time I’m going to seek downside exposure in the travel industry with RCL. After rallying nearly 250% over the past year, RCL is starting to show some cracks after breaking below its key support of $95-97. The breakdown targets $75 to the downside and we can potentially profit from that by buying the Nov $90/75 Put Vertical @ $4.07 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 5 Contracts for a risk of $2,035. We will set a stop loss on the put spread at 50% of the premium paid @ $2.00 Credit.

Closing Trades

• SBUX – 60.50% Gain: Buy to Close 7 Contracts (or 100% of your Contracts) Oct 27th $97/$102 Call Vertical Spreads @ $0.79 Debit. DailyPlay Portfolio: By Closing all 7 Contracts, we will pay $553. We initially opened these 7 Contracts @ $2.00 Credit. Our average gain, therefore, is $353 per contract. 
• FCX – 52.89% Loss: Sell to Close 8 Contracts (or 100% of your Contracts) Oct 20th $38/$45 Call Vertical Spreads @ $1.14 Credit. DailyPlay Portfolio: By Closing all 8 Contracts, we will receive $912. We initially opened these 8 Contracts on August 22 @ $2.32 Debit. Our average loss, therefore, is $118 per contract. 

SBUX Bearish Opening Trade Signal

View SBUX Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts Nov 3rd $93/$99 Call Vertical Spreads @ $2.45 Credit per contract.

Total Risk: This trade has a max risk of $2,130 (6 Contracts x $355) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $355 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is in a bearish trend and is expected to continue lower.

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 103

Stop Loss: @ $5.00 Debit (100% loss).

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. 

Investment Rationale

With the recent sharp rise in yields, equity valuations have come under pressure. The S&P has closed just at its major support level of $4330 and bulls need to hold this level to keep markets in a neutral trend, otherwise a break below turns bearish and targets $4100 to the downside. This requires us to close out our full FCX position, which has reached its stop loss level. Additionally, SBUX has reached our take profit level and we need to roll it lower to seek further bearish exposure now that its $95 support level has been broken. Roll to Nov 3 $93/$99 Call Vertical @ $2.45 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 6 Contracts for a risk of $2,130. We will set a stop loss on the put spread at 100% of the premium collected @ $5.00 Debit.

Closing Trade

• AMT – 42.97% Loss: Sell to Close 4 Contracts (or 100% of your Contracts) Oct 20th $180/$195 Call Vertical Spreads @ $2.92 Credit. DailyPlay Portfolio: By Closing all 4 Contracts, we will receive $1,168. We initially opened these 4 Contracts on August 24 @ $4.85 Debit. Our average gain, therefore, is $193 per contract. 

Investment Rationale

The market’s reaction to the FOMC meeting and Chairman Powell’s testimony is challenging to navigate. Despite bonds and equities selling off, the bond swap market continues to discount the Fed’s language and dot plot. Markets still show only a 28% chance of a rate hike in Nov and still expect rate cuts in the 1st half of 2024. We have to balance the knee-jerk selloff yesterday with the bigger picture view that the bond markets are providing and remain fairly neutral in this market. I advocated for a balance of long and short exposure in the DailyPlay portfolio. Currently, the S&P with its series of lower highs seems to target $4330 to the downside, and if a break below that would target $4100 below that. At the moment, I think it’s best to remove some exposure in trades that are long theta (time decay) that are not working and close out our AMT despite the fact that it has not yet reached its full stop loss level. 

Closing Trade

• TXN – 75% Gain: Buy to Close 3 Contracts (or 100% of your Contracts) Oct 13th $170/$180 Call Vertical Spreads @ $1.00 Debit. DailyPlay Portfolio: By Closing all 3 Contracts, we will be paying $300. We initially opened these 3 Contracts on Sept 5 @ $3.95 Credit. Our average gain, therefore, is $295 per contract. 

Investment Rationale

All eyes are on the FOMC meeting today, as Chairman Powell is expected to deliver no rate hikes and an interpretation of the current inflation and employment data. One of the unexpected drivers of inflation is oil as it approaches $100/barrel. This will cause a rise in inflation and a dent in consumer spending as discretionary spend is allocated away from goods and services towards gas tanks. And companies will have to raise prices to pass on fuel costs to consumers as well. Note that the 10-year yields are now firmly at risk of rising towards the 5.2% level, not seen since 2007, which is concerning for current equity valuations. We are going to take this opportunity to close out half of our TXN trade, closing the 3 contracts of the Oct 13 $170/$180 Call Vertical @ $1.00 Debit since we have reached 75% of Max Gain and keep our 5 Contracts of a Put Spread to seek further downside in semiconductors.