Intraday reversal had eyes poppin’ on the SPY
QQQ didn’t recover as much as the SPY but impressive nonetheless.
INTC has been a tech punching bag recently but is putting in a base just below $53. Over the next several sessions I will look for a bounce above the 8 EMA and another retest of the 50 SMA. If this happens by Wednesday of next week I would look to move into the $40 strike of the August monthlies. I would look to take profit on a test of the 50 SMA and stop out on a move back below the 8 EMA. As with all long calls, our max risk is what we pay for the option.
I will be looking to initiate a bearish position in GS ( Goldman Sachs ) , It has been in a range from $350 support to around $390 resistance. Stochastics on the daily as well are suggesting some short term bearishness while the MACD are suggesting possible indecision l This is a trade that has a 85 % statistical chance of winning based on todays pricing and delta of 16 ( Note as a credit seller winning a high percentage is great but a credit strategy can have trades lose much more money than you bring in on credit). I will be looking to set up a bearish call credit spread with my bias to the upside. I am going to place a $400/405 call credit spread if the pricing is between $372.00 to $376.00 area on Wednesday open . I will be using the Sept 17 expiry date . I like trades 30 to 45 days out and then look to try to take off for profit in the first 21 days where possible.
Based on todays pricing I should be able to get around $1.00 credit for an entry . The market maker will hold $500.00 for margin and if we hold to expiry worthless we make approx. 20 percent on the initial margin . Our breakeven on the trade will be $401.00 if we collect the $1.00 credit . So risking $400 to make $100.00 using a strategy that statistically has over an 80 percent chance of working in our favor.
With the stellar earnings announced on Thursday July 22, $NUE (Nucor Corporation LTP 98.38) created nice uptrend on Tuesday, based on small uptrend breaking out from crossover of 5 EMA, 20 EMA and 50 EMA. Fundamentally the company reported a YoY revenue growth of 103.1% for the 2nd Qtr. From here there is no immediate resistance till 110 and both the RSI and Stochastics look bullish for the short term. However, on the downside, with the broader market sell off on Tuesday, the stock could lose momentum and on the profit booking it could go up to the next support at 91.53 and then a stronger support at 82.82.