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Proactive Spreads, August 10th, 2021 – AMD, MSFT, FB

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The S&P is very, very quiet over the past three days. We did see a new marginal high, but we really aren’t seeing much of a push higher right here.

I think this could be a function of index composition. We’re on the backend of earnings seasons, and many tech names had the good news priced in.

On top of that, we FINALLY saw a break in treasuries, leading to higher rates. The current relationship (and it’s not permanent) is that when rates go up, it means tech sells off and we see runs in banks, commodities, and smallcaps.

I think that mechanic can persist, and it should give us some nice opportunities in large cap tech names IF we can manage a decent pullback.

Trade #1: AMD

This was a nice parabolic runner, and has seen some of the excesses wear off. The trend in AMD is still quite nice, and I think this does continue higher, but I’d like to see one undercut of today’s lows for a fresh entry.

Trade Setup

Expected Price: 103.27

Sell to Open AMD 17Sep21 92.5/90 Put Spread

Tier 1: Enter at 0.51, Exit at 0.17

Tier 2: Enter at 0.714, Exit at 0.35

Tier 3: Enter at 0.918, Exit at 0.46

Stop Out If Close Under 92.39

Trade #2: MSFT

This is a bit ambitious, but I think that softie has a chance to see a decent retracement. Earnings are out of the way and the stock didn’t really move that much, along with a failed move higher during Monday’s trade.

There’s the rising 50 day moving average and key support at 275. I don’t want to use that as my exact entry point, but just a little higher than that to start scaling in.

Trade Setup

Expected Price: 279.63

Sell to Open MSFT 17Sep21 265/260 Put Spread

Tier 1: Enter at 0.66, Exit at 0.08

Tier 2: Enter at 0.924, Exit at 0.1

Tier 3: Enter at 1.188, Exit at 0.11

Stop Out If Close Under 264.89

Trade #3: FB

Not sure we’ll get it, but I’ve got a measured moev that takes us down to the most recent pivot level. If we get there, I’ll be scaling in aggressively.

Trade Setup

Expected Price: 339.89

Sell to Open FB 17Sep21 325/320 Put Spread

Tier 1: Enter at 1, Exit at 0.32

Tier 2: Enter at 1.4, Exit at 0.68

Tier 3: Enter at 1.8, Exit at 0.9

Stop Out If Close Under 324.89

Disclaimer

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