Sunday Setups - 1/7

Happy Sunday,

To make your Monday more enjoyable, we’ve prepared some Fresh Trade Ideas for you. They go nicely with a freshly squeezed glass of lemonade!

What is the Sunday Lemonade?

It’s a short review of trades from last week and a detailed overview of trade ideas for this week. Build your trading strategy for the week in the time it takes to finish a glass of lemonade.

Alright, is that sugar kicking in? Let’s find some edge!

Market Review

Before we dive in to the individual trades that I am looking to take, I want to do a quick review of where the markets stand. Understanding the overall market trend will help guide us with how we approach these trades.

/ES (S&P Futures)

Trend looks bullish, and I don’t want to fight it.

However, there is some risk to the downside, based on the Put/Call Ratio. When the 10 day simple moving average of the Put/Call Ratio gets below 0.8, the probability of a pull-back increases. You can see this in action in the chart below. Top of the chart is the Put/Call Ratio, the purple line is the 10 day sma, & the bottom chart is the SPY.

The pullback we saw last week might just be a buying opportunity as price held the 21 day exponential moving average on the /ES. If we get a break lower, I’m looking at $4600 & $4540 to the downside - the mean (21ema). However, I am still leaning bullish and will ensure my entries are as close to the underlying stock’s 21ema as possible to be a bit more conservative.

Again - there is nothing bearish about new all time highs, and the trend remains in-tact. I am just noting the risk of a pullback as a reason to be a bit more conservative on entries.

Alright, let’s get back to the main show. Here is what I’m trading this week.

This week’s Trade Ideas

1.) APO  Long

Reasoning:

• Bullish Trend (8 ema > 21 ema > 34 ema); trading with the trend

• Daily Squeeze with positive momentum, which means a higher probability of making a larger move.

• Near all-time highs, which indicates there is likely more demand than supply

My Levels:

Entry Zone: $91.5 - $93.5

• 8 ema (blue line in chart) to the 34 ema (green line in chart)

• The current price is above the entry zone, so will be patient for entry

Targets: $97 - $102

• T1: $97

• T2: $100

• T3: $102

  • All of these are based on fibonacci clusters from prior swings

APO Options Strategies

**reminder: exits are theoretically priced two weeks out, but the price of the underlying is the primary trigger for taking the trade off. Entry is priced at the 8 ema.

Long Calls (Delta 72, 41 Days to Expiration, $90 Strike)

• Entry: BUY +1 APO 100 16 FEB 24 90 CALL @5.80 LMT

• Exit T1: SELL -1 APO 100 16 FEB 24 90 CALL @8.15 LMT

• Exit T2: SELL -1 APO 100 16 FEB 24 90 CALL @10.70 LMT

• Exit T3: SELL -1 APO 100 16 FEB 24 90 CALL @12.50 LMT

Call Debit Spread (Buying $95 & Selling $100 strikes, 41 Days to Expiration)

• Entry: BUY +1 VERTICAL APO 100 16 FEB 24 95/100 CALL @1.70 LMT

• Exit T1: SELL -1 VERTICAL APO 100 16 FEB 24 95/100 CALL @2.50 LMT

• Exit T2: SELL -1 VERTICAL APO 100 16 FEB 24 95/100 CALL @3.20 LMT

• Exit T3: SELL -1 VERTICAL APO 100 16 FEB 24 95/100 CALL @3.60 LMT

2.) WH  Long

Reasoning:

• Bullish Trend (8 ema > 21 ema > 34 ema); trading with the trend

• Daily Squeeze, which means a higher probability of making a larger move.

My Levels:

Entry Zone: $78.5 - $80

• Current price down to the 34 ema (green line in chart)

• The current price is in the entry zone, now that it is at the 8 ema. Slightly more aggressive entry at the 8.

Targets: $82.5 - $87

• T1: $82.5

• T2: $87

  • All of these are based on fibonacci clusters from prior swings. There are some targets higher at 89, 94, and 102 but those are longer term.

WH Options Strategies

**reminder: exits are theoretically priced two weeks out, but the price of the underlying is the primary trigger for taking the trade off.

Long Calls (Delta 75, 41 Days to Expiration, $75 Strike)

• Entry: BUY +1 WH 100 16 FEB 24 75 CALL @6.00 LMT

• Exit T1: SELL -1 WH 100 16 FEB 24 75 CALL @7.70 LMT

• Exit T2: SELL -1 WH 100 16 FEB 24 75 CALL @12.00 LMT

3.) HWM  Long

Reasoning:

• Bullish Trend (8 ema > 21 ema > 34 ema); trading with the trend

• Daily Squeeze with positive momentum, which means a higher probability of making a larger move.

• Near all-time highs, which indicates there is likely more demand than supply

My Levels:

Entry Zone: $52.4 - $53.4

• 8 ema (blue line in chart) down to the 34 ema (green line in chart)

• The current price is slightly above the entry zone

Targets: $56

• T1: $56

  • All of these are based on fibonacci clusters from prior swings

HWM Options Strategies

**reminder: exits are theoretically priced two weeks out, but the price of the underlying is the primary trigger for taking the trade off.

Long Calls (Delta 84, 41 Days to Expiration, $50 Strike)

• Entry: BUY +1 HWM 100 16 FEB 24 50 CALL @3.30 LMT

• Exit T1: SELL -1 HWM 100 16 FEB 24 50 CALL @6.30 LMT

There will likely be a few more alerts this week, as there are a lot of setups that fit into my trading plan. I’ll keep you posted!

Open Trades Review

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