MRNA Update

We will be adding the other half of the MRNA position that was originally opened last week: Buy to open April 22, 2022 $150/$175 Call Vertical @ $8.68 Debit

PYPL Bullish Opening Trade Signal

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy to open April 29, 2022, $100/$120 Call Vertical @ $6.95 Debit

Counter Trend Signal: This is a bullish strategy on a stock or ETF that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 1/10

OptionsPlay Score: 103

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.

Investment Rationale

Many payment-related stocks have sold off substantially in the past several months, and perhaps none more so than Paypal (PYPL). Despite its straight-down move, it is now showing a deep oversold reading that held against the 2020 Covid low and is now showing its first Aggressive Sequential -13 signal of the entire decline (along with a new Setup -9). That gives me a pretty good sense this could bounce from here, and as such, we will look to put on this April 29th $100/$120 call spread. Yesterday, this spread closed at $6.12 mid-price.

Taking Profits

• AWK:82% Gain: Sell to close Mar 18, 2022 $145/$155 Call Vertical @ $6.75 Credit. Please note, that half of this position was closed on Mar 4 at $6.30 Credit. Therefore, the average price of the entire position is $6.75, between the $6.30 and $7.20 closing prices. 
• MRNA Update – on Thursday, March 10, we sent an MRNA bullish signal where we recommended only opening half a position size, and adding the other half any subsequent day MRNA closes above the previous day’s close. While this condition was met yesterday, we will not be adding to our MRNA position due to the strong move higher yesterday. 

View TAN Trade

Strategy Details

Strategy: Put Credit Spread

Strategy Direction: Bullish

Details: Sell to open April 22, 2022 $74/$66 Put Vertical @ $3.32 Credit

Trend Continuation Signal: This is a bullish vertical spread trade on the a ETF that has a bullish 1M trend.

1M/6M Trends: Bullish/Neutral

Technical Score: 6/10

OptionsPlay Score: 92

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. 

Investment Rationale

Our bullish DailyPlay today is the Solar Invesco ETF (TAN). TAN is an ETF that has strong exposure to companies within the solar industry. The rationale behind this bullish play comes down to sharp moves higher in oil and electricity prices that has reignited interest in solar energy. From a technical perspective, price has recently formed an inverted head and shoulders pattern and has also broken above the $68 support level with strong momentum. This provides evidence of further upside ahead with the next major resistance level at $100. 

View XBI Trade

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy to open April 22, 2022 $88.5/$95 Call Vertical @ $2.65 Debit

Counter Trend Signal: This is a bullish strategy on a stock or ETF that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 89

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.

Investment Rationale

Though falling sharply since November, the ETF is about 50% of its all-time high; has been basing for over a month; and earlier this week posted a daily Combo -13 signal from its most oversold level to its 200-DMA we’ve seen in a couple of years.

Thus, we will look to buy an April 22nd $88.5/$95 call vertical for $2.65 debit – its closing mid-price spread from yesterday.

View MRNA Trade

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy to open April 22, 2022 $140/$170 Call Vertical @ $10.40 Debit

Counter Signal: This is a bullish strategy on a stock or ETF that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 1/10

OptionsPlay Score: 103

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.

Investment Rationale

MRNA has sold off some 60% from all-time highs, with it even having been as much as 75% off that high earlier this week. But it held the March 2021 low this week, which was the last low before last year’s surge higher, while also three weeks ago marking a weekly Setup -9 count and this week seeing the weekly cloud’s Lagging Line bounce on the top of its cloud. It also bottomed against the most recent downtrend line drawn. Yesterday’s large move higher is attributed to a sell-side analyst upgrading the name. That may be the first of several more to come, and we think it’s now worth getting long for a trading bounce. 

Thus, we will look to buy an April 22 $140/$170 call spread for a $10.40 debit – its closing mid-price spread from yesterday.

Closing Trade

• TJX:64% Loss: Sell to close Apr 14, 2022 $65/$72.5 Call Verticals @ $0.95 Credit. 

Equities experienced a quick reversal yesterday on news regarding a possible ceasefire between Russia and Ukraine, however, the major indices reversed lower to end the day in the red. SPY and QQQ are set to open higher this morning but still remain below the $428 and $341 key levels respectively. We take this opportunity to close the TJX position that broke below the $63 major support level recently, thus invalidating our thesis. 

View XLI Trade

XLI Bearish Opening Trade Signal

Strategy Details

Strategy: Put Debit Spread

Strategy Direction: Bearish

Details: Buy to open April 14, 2022 $97/$89 Put Vertical @ $2.09 Debit. Please note that the price at the open may differ slightly due to pre-market activity and wider bid/ask spreads at the close. Adjust the strikes based on how far XLI opens from yesterday’s closing price at $97.70. Please refer to the DailyPlay video at the bottom of this email to learn more. 

Bearish Trend Signal: This is a bearish strategy on a stock or ETF that is experiencing a bearish trend.

1M/6M Trends: Bearish/Bearish

Technical Score: 6/10

Investment Rationale

Weekly Lagging Line has now broken its Base Line, while cloud top and Conversion and Base Lines are last and this week’s highs. We’ll look for this to decline to cloud bottom, using the weekly close above cloud top at $102 as an area where we know we don’t want to be short.

View SPY Trade

SPY Bearish Hedge Opening Trade Signal

Strategy Details

Strategy: Put Debit Spread

Strategy Direction: Bearish

Details: Buy to open April 14, 2022 $422/$387 Put Vertical @ $7.48 Debit

Hedge Signal: This is a bearish vertical spread trade on the SPY ETF to hedge against further market decline

1M/6M Trends: Bearish/Bearish

Technical Score: 6/10

OptionsPlay Score: 132

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. 

Investment Rationale

As the implied correlation of stocks rise with the high market volatility, it is time to play more defensive, and placing a hedge to protect against further decline is our DailyPlay trade today. SPY’s trends have turned bearish and price has broken below a 2-year trendline indicating further downside is on the cards. With the ongoing crisis in Ukraine, the geopolitical picture is also negative. Thus, we will look to buy the April 14 $422/$387 put spread for a $7.48 Debit (Friday’s close price). This trade will act as a hedge against further market declines.

In the event that SPY opens significantly below $429, the strike prices may need to be adjusted accordingly. 

Taking Profits

• MS: 95% Gain: Buy to close Apr 1, 2022 $102/$109 Call Verticals @ $0.12 Debit. 

Risk appetite took a hit this morning as news relating to a nuclear power station attack dragged European Indices lower this morning. Both SPY and QQQ are showing signs of weakening momentum despite the strong bounce at the end of last week and both indices are failing to break above their 21 D EMA. We take this opportunity to close the remainder of the MS position which is just shy of max profit with 28 days to expiration. 

Please note, that half of this position was closed on Feb 25 at $0.58 Debit. Therefore, the average price of the entire position is $0.35, between the $0.58 and $0.12 closing prices. 

• AWK:59% Gain: Sell to close Mar 18, 2022 $145/$155 Call Vertical @ $6.30 Credit. Close half of this position. For example, if 10 contracts were opened for this trade, we recommend closing 5 contracts.

While the ongoing Ukraine conflict continues to add pressure to markets, equities managed to move higher yesterday as investors reacted positively to the Fed’s rate hikes being less aggressive than originally estimated. However, Fed Chair, Jerome Powell, stated that a more aggressive approach would be warranted in the event that inflation does not cool as quickly as expected. Both SPY and QQQ managed to end the day in the green and remain above key support areas at $429 and $341 respectively.