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

View Closing Trades

Closing Trades

• WFC – 48% Gain: Short Nov 26, 2021 47/50 Put Verticals @ $0.55 Debit

DailyPlay Positions Outlook:

Equities continue their charge higher with SPY and QQQ both touching all-time highs yesterday once again. We notice a slight narrowing in leadership compared to recent weeks. While this is no cause for concern yet, continued narrowing leadership does pose more downside risks. We are taking this opportunity to take profits on our WFC bullish position as it has reached our take profit level after breaking out of resistance. 

Prakash Vijayanath
Analyst at OptionsPlay

View DPZ Trade

Market Outlook:
After a big week for big tech with regards to earnings, the major equity indices ended the week at new all time highs. AAPL and AMZN disappointed on earnings after the bell on Thursday causing both SPY and QQQ to open lower, but strong momentum carried the indices 0.2% and 0.5% higher respectively. The next major event will be the Fed’s 2 day meeting this Tuesday – Wednesday which is expected to cause some volatility as markets prepare for a tapering of monetary policy. Sector rotation remains relatively healthy and indicates broad market participation. Rotation into Discretionary remains strong with Healthcare, Tech, and Real Estate also providing leadership. Sectors to avoid are Communications and Staples, both of which are showing weak momentum and relative strength.

DPZ Bullish Trade Idea:
Our bullish trade idea today is Dominos Pizza Inc (DPZ). DPZ is part of the Consumer Discretionary sector which is the strongest sector currently and is outperforming on strong momentum and relative strength against the market. Price recently rallied to a minor resistance level at $489 and strong momentum on both the weekly and daily timeframes indicates that this level will be broken. From a fundamental perspective, DPZ has been successful in utilizing its digital assets to gain market share in international markets. 

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

• Take Profit: $5.10 Debit
• Stop Loss: $20.40 Debit

View DPZ Trade