We’re starting to see signs of a rotational rug pull.
Sure, financials and energy stocks look good… but many pockets of momentum are getting hit. Hard.
I’m not talking about AAPL or other mega-cap tech stocks. Some of the darlings in the momentum space are seeing heavy liquidations. Solar stocks have seen 20% corrections already, and biotech has been hit as well.
I want to start scaling into long positioning in some of these areas as they offer the best risk/reward on just a little bit more of a dip.
Trade #1: TAN
This is a solar ETF that got nailed today. It’s tradign back to support and a rising trendline will come up to price here soon. I want to be involved on any further weakness this week.
Expected Price: 99.01
Sell to Open TAN 19Mar21 90/85 Put Spread
Tier 1: Enter at 1.32, Exit at 0.69
Tier 2: Enter at 1.848, Exit at 1.2
Tier 3: Enter at 2.376, Exit at 1.63
Stop Out If Close Under 89.89
Trade #2: IBB
Similar structure in biotech – IBB. Looking for the pull into the 50 day moving average, and previous price support. I don’t think that this will go straight down, but establish some boring trading range like we saw in the second half of 2020.
Expected Price: 160.54
Sell to Open IBB 19Mar21 153/150 Put Spread
Tier 1: Enter at 0.59, Exit at 0.18
Tier 2: Enter at 0.826, Exit at 0.38
Tier 3: Enter at 1.062, Exit at 0.51
Stop Out If Close Under 152.89
Trade #3: PYPL
This is a “first pull” setup I’ve been waiting on. The stock had good earnings and a gap higher, and the pull into that gap is where I want to start getting bullish.
Expected Price: 269.14
Sell to Open PYPL 19Mar21 250/240 Put Spread
Tier 1: Enter at 1.95, Exit at 0.58
Tier 2: Enter at 2.73, Exit at 1.27
Tier 3: Enter at 3.51, Exit at 1.69
Stop Out If Close Under 249.89