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Proactive Spreads, August 20th, 2021 – NKE, AMZN, SQ

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After a little shakeout, the S&P held the previous range lows, just above a rising 50 day moving average and key trendline.

I’m not sure that this was it… there wasn’t enough of a hedging panic to put in a low in the market, but overall, large caps look fine. The Russell 2000 is near the low end of its trading range, and it needs to hold for overall risk appetite to stay bid. For the moment it looks like it will.

Right now, we are going to plan some setups that require just a bit more push to the downside. We’ve already been filled on a handful of other names so we don’t need to go “all in” from just a small pullback.

Let’s be patient and look for the best entries available.

Trade #1: NKE

The stock had a great runa fter earnings, and did see a small gap down. If we can get a second push lower, it will come into a key pivot level, a rising 50 day moving average, and a VWAP from the earnings breakout.

Trade Setup

Expected Price: 159.59

Sell to Open NKE 15Oct21 145/140 Put Spread

Tier 1: Enter at 0.75, Exit at 0.02

Tier 2: Enter at 1.05, Exit at 0.26

Tier 3: Enter at 1.35, Exit at 0.32

Stop Out If Close Under 144.89

Trade #2: AMZN

AMZN has traded like hot garbage since its earnings report, and is getting oversold enough to justify an entry. I want to play against the pivot lows from the last earnings fade as a clean entry.

Trade Setup

Expected Price: 3135

Sell to Open AMZN 17Sep21 3020/3010 Put Spread

Tier 1: Enter at 0.75, Exit at 0.83

Tier 2: Enter at 1.05, Exit at -0.74

Tier 3: Enter at 1.35, Exit at -1.08

Stop Out If Close Under 3019.89

Trade #3: SQ

SQ had a failed breakout above 280, and while it could stabilize here, I want to see another push just under that trendline and pivot support for an entry.

Trade Setup

Expected Price: 247.21

Sell to Open SQ 15Oct21 220/210 Put Spread

Tier 1: Enter at 2, Exit at 0.64

Tier 2: Enter at 2.8, Exit at 1.36

Tier 3: Enter at 3.6, Exit at 1.8

Stop Out If Close Under 219.89

Disclaimer

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