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Full Time Profits, August 24th, 2020 – TGT, AAPL, BABA

August 24, 2020 By Steven Place

Markets are running to new highs. Again. The “reason” we’re told is a new treatment for Cov-19, but the reality remains that we are in a “big water, small hose” environment.

The response to the crisis in March has left financial markets awash in liquidity… and the number of investable assets really hasn’t changed. Whether this is right or wrong is not up to us as speculators, we just need to focus on the trend to pull profits out.

I think the market is due for some rotation– tech is way ahead of itself so we’ll look at a short setup today. Our other focus will be on some large cap stocks that should have a tendency to grind higher.

Trade #1: TGT

TGT had a monster move on earnings. We’re going to play the “Post Earnings Announcement Drift” and I expect the stock to move higher, or at least create a new base at these higher prices.

Trade Setup

Expected Price: 153.22

Sell to Open TGT 18Sep20 145/140 Put Spread

Tier 1: Enter at 0.65, Exit at 0.09

Tier 2: Enter at 0.91, Exit at 0.09

Tier 3: Enter at 1.17, Exit at 0.09

Stop Out If Close Under 144.89

Trade #2: AAPL

We’re going to give this a shot. AAPL is overbought via several metrics — distance from 50 day moving average, RSI, and a few others. It’s jamming hard into its split event, and I’m looking for the market to “sell the news” before the split.

Trade Setup

Expected Price: 509.38

Sell to Open AAPL 18Sep20 570/575 Call Spread

Tier 1: Enter at 0.7, Exit at -0.04

Tier 2: Enter at 0.98, Exit at 0.17

Tier 3: Enter at 1.26, Exit at 0.21

Stop Out If Close Over 571.11

Trade #3: BABA

Clear breakout out of a multi-month consolidation pattern. I checked the options and the premium is still very attractive. Similar to TGT, I’m looking for it to “drift” higher over the next few weeks.

Trade Setup

Expected Price: 275

Sell to Open BABA 18Sep20 255/252.5 Put Spread

Tier 1: Enter at 0.5, Exit at 0.16

Tier 2: Enter at 0.7, Exit at 0.34

Tier 3: Enter at 0.9, Exit at 0.45

Stop Out If Close Under 254.89

Disclaimer

U.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN

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