QQQ Bearish Opening Trade Signal

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Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 3 Contracts July 3rd $365 Puts @ $3.76 Debit per contract.

Total Risk: This trade has a max risk of $1,128 (3 Contracts x $376) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 1% of your portfolio value and divide it by $376 to select the # shares for your portfolio.

Counter Trend Signal: This stock has been bullish but traded into an area of resistance and is expected to pull back lower.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 85

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

Chairman Powell will testify in Washington today and this presents a risk to the markets that have shrugged off the idea of further rate hikes. With a resilient housing market and strong labor market, there is reason to believe that the Fed is comfortable with further rate hikes to bring inflation back to its 2% mandated target. Tech stocks are at the most risk of a pullback if the market is spooked by Chairman Powell’s testimony today and tomorrow. In my opinion, this is not enough of a reason to remove tech stocks from a portfolio or to take a bearish position, but it is prudent to consider buying some short-dated protection. With QQQ tagging the $370 resistance level, a potential reversal level, I advocate allocating 1% of our portfolio value to buy short-dated QQQ puts while volatility is low. If these next 2 days end up being a non-event, we can simply close out the trade by the end of this week. Buy 3 Contracts of the July 3 $365 Puts @ $3.76 Debit. 

QQQ – Daily

WBA Bullish Opening Trade Signal

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Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 7 Contracts July 21st $30/$35 Call Vertical Spreads @ $2.79 Debit per contract.

Total Risk: This trade has a max risk of $1,953 (7 Contracts x $279) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $279 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has been bullish and is expected to continue higher.

1M/6M Trends: Bullish/Neutral

Technical Score: 2/10

OptionsPlay Score: 67

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

We head into a week that has investors both optimistic and concerned about the parallels to the 1999 tech lead rally. With the Nasdaq-100 touching $15250 resistance last week, all eyes are on Chairman Powell’s testimony on Wednesday and Thursday. Hints at further hikes could pour cold water on the rally. Overall, market breadth has continued to improve and provides confidence in the state of the current rally. Moreover, the AI stocks leading the market higher have little in common to the unprofitable, zero-revenue-driven hype from 1999. I believe that for investors concerned about the rally it’s better to take a neutral tone rather than outright bearish in the face of such strong bullish momentum. Looking at our DailyPlay portfolio, we have an opportunity to add to a winning position and raise our stops in WBA. We have confirmed the $30 lows and broken out above the $32 congestion zone on strong volume. We are now looking to ride this trend to our $35 target. I’m looking to commit another 2% of our overall portfolio to buy 7 more contracts of the July $30/35 Call Vertical @ $2.79 Debit and raise stops to our original breakeven price of $1.50. If we are successful in this adjustment, we can realize a maximum profit of $5,747 while losing only $903 if we are stopped out on all 19 contracts. 

This is a reminder of our DailyPlay mandate, which is focused on helping you become a profitable trader. The only path to profitability is to have your winners be larger than the losers. We show you how to achieve this by turning small winners into large winners while cutting losses quickly. 

WBA – Daily

AAPL Bearish Opening Trade Signal

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Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts July 28th $190/$195 Call Vertical Spreads @ $1.78 Credit per contract

Total Risk: This trade has a max risk of $1,932 (6 Contracts x $322) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $322 to select the # shares for your portfolio.

Counter Trend Signal: This stock is currently bullish but generated a counter-trend sell signal, therefore we expect this stock to not continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 103

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

The market is starting to play chicken again with the Fed again. Equity markets have now completely shrugged off the idea of further rate hikes, pricing in the exact opposite, rate cuts. The 2y-10y treasury yield curve has inverted further towards -100bps, suggesting concerns of a hard landing and AI tech stocks have hit a new all-time high. Despite being overbought by most measures, momentum continues to push equities higher as the fear of missing out has taken over the markets. Our portfolio is currently positioned with all bullish positions given the current market trends, however I currently advocate adding neutral positions given the stretched nature of the current market rally of over 16% in the past 3 months, betting on a pause or consolidation.

I’m looking at AAPL, which has generated a counter-trend sell signal on both the daily and weekly timeframes. After a 50% rally since Oct and now trading at 28x forward earnings, despite only expecting about 9% EPS growth for next year, it looks stretched. However, keep in mind that doesn’t mean it can’t get more stretched and trade at even higher valuations. Which is why I’m taking a neutral tone with a bit of room by selling an OTM call vertical and limited risk. I’m selling the July 28 $190/$195 Call Vertical @ $1.78 Credit. 

Investment Rationale

The Fed took a pause from raising interest rates in June but left the door open for further rate hikes in July. Markets initially sold off but recovered almost all of it by the close, effectively shrugging off the idea of further rate hikes. The Nasdaq closed up 0.73% on the day and longer-dated bonds caught a bid as well. At the moment the bullish trend remains intact, however markets are overextended after a 25% rally over the past 3 months. This is a difficult environment to trade, adding new long exposure comes with high risk of a pullback, yet shorts into a bullish trend faces a higher statistical chance of loss. So for today, we will take a pause from entering new positions and look to adjust an open trade. ORCL beat on earnings and continued its upward momentum, let’s roll our July 7th debit spread for a 75% gain and take the profits to buy 5 Contracts of the Aug $120/$130 Call Vertical @ $4.25 Debit. This locks in about $450 in profits, while maintaining further upside to $130 without any additional risk. 

As a reminder, our focus of the DailyPlay signals is not the ideas or stocks themselves, but teaching position sizing and risk management techniques that help you become profitable. With ORCL, I would rather risk turning a nice profit into a much smaller winner, if it gives me the opportunity to turn my initial investment into a home run. You do not need to hit many home runs to offset a large number of small losers. However, this only works if we remain disciplined in cutting losses quickly. If ORCL were to close above $130 by Aug expiration, that equates to roughly a $5,451 gain, which would offset about 5 of our losing trades alone. 

BA Bullish Opening Trade Signal

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Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 3 Contracts Aug 18th $225/$250 Call Vertical Spreads @ $7.42 Debit per contract.

Total Risk: This trade has a max risk of $2,226 (3 Contracts x $742) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $742 to select the # shares for your portfolio.

Trend Continuation Signal: This stock broke above a key level, and is expected to continue its bullish trend.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 109

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

Today’s price action further solidifies what we laid out at the beginning of the week. We saw the rest of the market play catchup to the Tech rally. RSP (equal weight S&P) outperformed both SPY and QQQ, which confirms the improving market breadth. This provides further conviction behind the bullish trend in equities and confirms our positioning to be long equities. Yesterday’s CPI print cements a rate pause by the Fed. There is a growing consensus that the Fed can pause going forward, despite not yet reaching its 2% inflation target. The downside risk is that the Fed pushes on with more rate hikes to bring inflation down to its 2% target given the strength of the US economy and labor market. And one sector that has started to show relative strength has been Industrials and Boeing (BA) just broke out of a 6 month trading range between $200 and $215. While Boeing has more issues to sort through in its multi-year turnaround, price action is starting to look positive and has the potential to continue higher. Look to Buy Aug $225/$250 Call Vertical @ $7.42 Debit, risking 3.3% of the stock’s value to position for a breakout higher. 

BA – Daily

Closing Trade

• CAH – 56.42% Loss: Sell to Close 10 Contracts (or 100% of your Contracts) July 21st $82.50 Puts @ $0.73 Credit. DailyPlay Portfolio: By Closing all 10 Contracts, we will receive $730. 

Investment Rationale

Equity markets have continued its bullish trend from last week during yesterday’s session with Tech leading the charge. SPY has broken out above last week’s $430 resistance and +9 Sell Setup. Weekly Charts on SPY, QQQ, IWM and RSP all look constructive for further upside. All eyes are now on this morning’s CPI print this morning and the Fed meeting on Wednesday. Pay attention to the language around the July meeting and whether a rate hike is on the table. For now, we maintain our bullish views and continue to position for further upside and look to cut our losses on short positions. CAH has reversed back to its 52-week highs and proven that our bearish thesis is no longer holding, warranting closing out the full position here. Despite catching the ORCL trade after the gap higher, earnings came out better than expected and we will monitor this today for an opportunity to adjust for further upside. 

CAH – Daily

Closing Trade

• TSLA – 43.70% Loss: Sell to Close 2 Contracts (or 100% of your Contracts) Aug 18th $210/$170 Put Vertical Spreads @ $6.39 Credit. DailyPlay Portfolio: By Closing the 2 Contracts, we will receive $1,278. 

ORCL Bullish Opening Trade Signal

View ORCL Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 8 Contracts July 7th $111/$120 Call Vertical Spreads @ $2.70 Debit per contract.

Total Risk: This trade has a max risk of $2,160 (8 Contracts x $270) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $270 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has in a bullish trend, which is expected to continue higher.

1M/6M Trends:Bullish/Bullish

Technical Score: 10/10

OptionsPlay Score: 116

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

As equity markets continue to improve with small caps and the equal-weight S&P 500 starting to play catchup, we enter a big week with a potential Fed pause on Wednesday. The S&P did print a Daily -9 Sell Signal on Thursday but the overall picture is improving in favor of the bulls. As we look towards next week, ORCL reports earnings after the closing bell today. Despite trading at 52-week highs, ORCL trades at a relative discount to its “AI peers” at only 21x forward earnings. This valuation is expected given ORCL’s modest expected EPS growth rate of only 3%, but guidance could accelerate those expectations on the back of their AI-focused deals in the past quarter. We are taking this opportunity to play for upside by buying a July 7 $111/120 Call Vertical @ $2.70 Debit. 

ORCL – Daily

JPM Bullish Opening Trade Signal

View JPM Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 5 Contracts July 21st $140 Calls @ $4.13 Debit per contract.

Total Risk: This trade has a max risk of $2,065 (5 Contracts x $413) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $413 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has been bullish and is expected to break out above an area of resistance.

1M/6M Trends:Bullish/Bullish

Technical Score: 7/10

OptionsPlay Score: 95

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

Despite tech names leading another rally (QQQ) and leaving the rest of the market (RSP) behind market breadth does continue to improve. 53% of S&P 500 stocks are now trading above its 200 D SMA, vs 35% a couple of weeks ago. This adds support to confirm the break above $4200 on the S&P 500 can hold. Tomorrow’s close will be an important milestone in solidifying the bullish trend that was kicked off this week. For adding to our long exposure we look to financials. JPM has been leading the pack within financials, the only major bank that has outperformed its sector over the past 9 months. Trading just below its $143 resistance level, JPM is primed for a potential breakout. We are positioning for the breakout above this key resistance level up to its $163 resistance area. With IV Rank under 5% options are inexpensive so I’m looking to Buy the July $140 Calls @ $4.13 Debit. 

TSLA is on watch to potentially cut losses as our initial thesis that the $205-210 resistance area as a turning point has not held. 

JPM – Daily

CAH Bearish Opening Trade Signal

View CAH Trade

Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 5 Contracts July 21st $82.50 Puts @ $2.20 Debit per contract.

Total Risk: This trade has a max risk of $1,100 (5 Contracts x $220) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $220 to select the # shares for your portfolio.

Counter Trend Signal: This stock has recently turned from bullish to neutral as it found resistance, while we expect to see a pullback from this level.

1M/6M Trends: Neutral/Bullish

Technical Score: 6/10

OptionsPlay Score: 80

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. 

Investment Rationale

Yesterday’s market saw both scenarios that we outlined earlier this week start to play out. Both overbought AI tech names saw a pullback and the broader market started to play catchup. The RSP chart is starting to poke out above the weekly cloud with the lagging line now inside the cloud. We will see if this strength can sustain through Friday’s close, if so, we have the foundations for a bullish trend and potentially continue to add to our RSP position. One trade that I want to revisit is our short position on CAH which was initiated a couple of weeks ago. We were able to take early profits with half the position, and now that CAH has rallied back to resistance and confirmed another rejection, I advocate that we add back another 1% of the portfolio’s capital on this trade for increased downside exposure. Buy to Open 5 Contracts July $82.50 Puts @ $2.20 Debit. 

CAH – Daily

Closing Trade

• OIH – 49.86% Gain: Buy to Close 2 Contracts (or 100% of your remaining Contracts) June 16th $265/$255 Put Vertical Spreads @ $2.25 Debit. DailyPlay Portfolio: By Closing the last 2 Contracts, we will pay $450. We partially closed this trade on May 31 @ $5.45 Debit. Our average cost basis to exit this trade is therefore @ $3.32 and our average gain on this trade is 25.29%.

Our DailyPlay Strategy

Whether you’ve been a member for years 📆, or just starting your free trial, I wanted to take an opportunity to explain how we strive to help you become a profitable trader 💰 with real trading examples every day ☀️.

My name is Tony Zhang 🙋‍♂️, the Chief Strategist at OptionsPlay. I have been a strategist for 17 years and have worked with thousands of retail and institutional traders over that time ⏰.

How we achieve this is summed up by a single sentence: We add to winning positions 📈 and we cut losers quickly 🏃‍♂️.

The reality is that no one knows what the markets will do tomorrow 🔮. We can’t control the direction of any stock 📉, we can only control where we choose to take risks 🎲.

We aim to be profitable by adding size to winning positions 🚀 and risk turning a winning trade into a small loss 💔 because it gives us the opportunity to hit big home runs ⚾️.

While cutting losses ruthlessly ensures that we never have huge blowups 💥. By being disciplined to these 2 rules, we ensure that in the long run, our winners outpace our losers and we are profitable 💸.

All of our trades start with initially risking 2% of our total portfolio value. We never add to a losing position ❌, and we only add another 1-2% of risk, if a trade becomes profitable and have the opportunity to ride the trend 🌊.

With 10 days left on our OIH trade and a 49% gain on the short put spread, this is time to take profits. The options are not favorable to sell another put spread and extend this trade, but we will monitor OIH for a pullback opportunity to gain bullish exposure over the next few trading sessions.