We are starting off today’s newsletter with a look at QQQ – the Nasdaq 100 ETF.
Earnings are out. Headline risk is gone. Overall markets are making higher highs and higher lows.
Yet near term, we’re a touch extended.
QQQ is coming into a HUGE resistance area at 170. This is the gap fill area from the “island top” pattern put in at the most recent peak.
I’m not super bearish here. I think the headline risk has worn off and any correction will be sideways before we make a move higher.
The gameplan here is to look for pullbacks in the strongest stocks.
Trade #1: AAPL
After its earnings, the stock is a touch extended. It has broken to new highs, and I think any backfill will be bought here as it restest its previous breakout levels.
Trade Setup
Expected Price: 185
Sell to Open AAPL Jul 170/165 Put Spread
Tier 1: Enter at 0.60, Exit at 0.10
Tier 2: Enter at 0.90, Exit at 0.40
Tier 3: Enter at 1.20, Exit at 0.70
Trade #2: NVDA
NVDA just released earnings. Good numbers, yet they were probably priced in with the most recent ramp higher. Look for a pull to that gap fill to start scaling in. If it runs to 300 without us, so be it.
Trade Setup
Expected Price: 242
Sell to Open NVDA Jul 210/205 Put Spread
Tier 1: Enter at 0.80, Exit at 0.30
Tier 2: Enter at 1.10, Exit at 0.60
Tier 3: Enter at 1.40, Exit at 0.90
Trade #3: CMG
This is a post-earnings bull flag. Expect higher prices.
Trade Setup
Expected Price: 427.50
Sell to Open CMG Jul 370/365 Put Spread
Tier 1: Enter at 0.60, Exit at 0.10
Tier 2: Enter at 0.90, Exit at 0.40
Tier 3: Enter at 1.20, Exit at 0.70
Trade #4: FB
Massive earnings gap, and the stock is jamming higher into all time highs without much of a pullback. This is one large cap tech I like as a short here.
Trade Setup
Expected Price: 187.27
Sell to Open FB Jul 205/210 Call Spraed
Tier 1: Enter at 0.73, Exit at 0.23
Tier 2: Enter at 1.03, Exit at 0.53
Tier 3: Enter at 1.33, Exit at 0.83