Sunday Setups - 2/25

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.

Before we get started, a friendly reminder that if you join Fresh Trade Ideas Community, you’ll unlock instant access to:

📈 All of our Premium Trade Ideas.

⏰ Real-time trade alerts throughout the week.

📗 Learn how to find the best setups on your own.

❓Ask any questions about setups, the market, or options.

And much more.

👉 Take advantage of our special deal for newsletter subscribers and join today for $1.

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) & /NQ (Nasdaq Futures)

NVDA decided to put the entire market on its back and take it to new all time highs.

Both the /ES and the /NQ pulled back to their weekly 8 emas (blue lines in the below charts), and found support. NVDA earnings was the catalyst to send them back up.

/NQ was the weaker of the two indices, as it pulled back to the daily 34ema. The /ES only pulled back to the daily 21ema. The /ES also led to new highs. So, while the volatility in tech offers some great opportunities, some stronger names in the S&P might offer a few trades with less stress.

The /ES hit a few extensions from the recent swings, but there is a larger 127.2% level above at $5,163.50. Clearly, there is going to be a bit of back and forth, but my bias is to the long side. Given the volatility, it stresses the importance of good entries and picking names with strong patterns.

The /NQ also hit some extensions from recent swings, but it has a larger 127.2% extension above at $18,476. It has also developed a daily squeeze, which could take the markets higher over the next week or so.

I’m still focused on the long side, but will not rule out the idea that this squeeze could take us lower. There are two reasons for that risk:

1. The Put/Call Ratio is below 0.8, which means that the majority of the market is focused on the long side. So, a selloff could ignite a larger move down, as participants scramble to exit longs.

2. The mag 7 stocks (AAPL, MSFT, GOOGL, AMZN, NVDA, TSLA, META) largely did not participate in the upside, with the exception of NVDA & AMZN. So, the movement in the indices is largely concentrated in one name, meaning the general bias was bearish otherwise.

So, again the million dollar question - where do we go from here? The daily squeeze in /NQ and the weekly all time highs suggest that I focus on the long side, but I’ll do that in strong names with a squeeze setting up. Given the “topiness” feeling of these markets, I’ll also look at hedges with long puts or selling call credit spreads on the indices.

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

This week’s Trade Ideas

1.) ORLY  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.

• Weekly squeeze fired, suggesting a more prolonged move.

• Near all-time highs, so less resistance overhead.

My Levels:

Entry Zone: $1,022 - $1,047

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

• The current price is above the entry zone

• I’d prefer to enter at the 21 ema, but I’m ok scaling into this one. Entries are priced at $1,047.

Targets: $1,095 - $1,111

• T1: $1,095

• T2: $1,111

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

ORLY 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 64, 54 Days to Expiration, $1040 Strike)

• Entry: BUY +1 ORLY 100 19 APR 24 1040 CALL @39.50 LMT

• Exit T1: SELL -1 ORLY 100 19 APR 24 1040 CALL @69.00 LMT

• Exit T2: SELL -1 ORLY 100 19 APR 24 1040 CALL @82.50 LMT

Long Call Debit Spread (Buying $1080 & Selling $1100 strikes, 54 Days to Expiration)

• Entry: BUY +1 VERTICAL ORLY 100 19 APR 24 1080/1100 CALL @6.80 LMT

• Exit T1: SELL -1 VERTICAL ORLY 100 19 APR 24 1080/1100 CALL @12.40 LMT

• Exit T2: SELL -1 VERTICAL AMD 100 (Weeklys) 28 MAR 24 175/195 CALL @13.00 LMT 

  • will likely take these all off at T1: $1,095, given the upside gets limited

2.) ROP  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.

• Near all-time highs, so less overhead resistance

My Levels:

Entry Zone: $545 - $550

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

• The current price is above the entry zone. Entries are priced at $550.

Targets: $570 - $596

• T1: $570

• T2: $585

• T2: $596

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

ROP 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 72, 54 Days to Expiration, $540 Strike)

• Entry: BUY +1 ROP 100 19 APR 24 540 CALL @23.25 LMT

• Exit T1: SELL -1 ROP 100 19 APR 24 540 CALL @36.00 LMT

• Exit T2: SELL -1 ROP 100 19 APR 24 540 CALL @49.50 LMT

• Exit T3: SELL -1 ROP 100 19 APR 24 540 CALL @60.00 LMT

Long Call Debit Spread (Buying $570 & Selling $590 strikes, 54 Days to Expiration)

• Entry: BUY +1 VERTICAL ROP 100 19 APR 24 570/590 CALL @2.30 LMT

• Exit T1: SELL -1 VERTICAL ROP 100 19 APR 24 570/590 CALL @5.60 LMT

• Exit T2: SELL -1 VERTICAL ROP 100 19 APR 24 570/590 CALL @9.00 LMT

• Exit T3: SELL -1 VERTICAL ROP 100 19 APR 24 570/590 CALL @11.70 LMT

3.) MSFT  Long

Reasoning:

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

• Near all-time highs, so less overhead resistance.

My Levels:

Entry Zone: $400 - $408

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

• The current price is right above the entry zone. I’d like to enter at the high of the 2/21 bar, thinking that it might fill that gap it made the next day - so, entries priced at $402

Targets: $422 - $448

• T1: $422

• T2: $434

• T3: $448

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

MSFT 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 66, 54 Days to Expiration, $400 Strike)

• Entry: BUY +1 MSFT 100 19 APR 24 400 CALL @16.20 LMT

• Exit T1: SELL -1 MSFT 100 19 APR 24 400 CALL @26.50 LMT

• Exit T2: SELL -1 MSFT 100 19 APR 24 400 CALL @37.00 LMT

• Exit T3: SELL -1 MSFT 100 19 APR 24 400 CALL @50.00 LMT

Long Call Debit Spread (Buying $420 & Selling $450 strikes, 54 Days to Expiration)

• Entry: BUY +1 VERTICAL MSFT 100 19 APR 24 420/450 CALL @5.50 LMT

• Exit T1: SELL -1 VERTICAL MSFT 100 19 APR 24 420/450 CALL @10.00 LMT

• Exit T2: SELL -1 VERTICAL MSFT 100 19 APR 24 420/450 CALL @15.00 LMT

• Exit T3: SELL -1 VERTICAL MSFT 100 19 APR 24 420/450 CALL @20.00 LMT

I’ll keep you posted on any trades I take!

Open Trades Review

Week of 1/28 Trade Ideas

• UHS (1/29 entry)

  • Still holding. Earnings are next week, so will look to exit on any strength - not going to hold through earnings.

• PVH (1/31 entry)

  • Still holding 2/3rd for $147 overhead. Chart still looks good, and made good progress this week. Running out of time, so might just book the profits, if this doesn’t move soon.

Week of 2/4 Trade Ideas

• GS (2/5 entry)

  • Good entry, but no targets hit yet. Still holding - chart looks good, and nothing has changed. Just really taking it’s time.

• CARR (2/5 entry)

  • Still holding. We’re back at the 144 EMA on the daily, which is often support. If we close below that, I’ll exit, but still holding for now.

Week of 2/11 Trade Ideas

• LEN (2/13 entry)

  • Price regained the EMAs, still in a squeeze - bullish setup still in tact. Holding.

• ACM (2/13 entry)

  • Still looks good. Holding.

• IT (2/12 entry)

  • Still looks ok. Price regained the EMAs, but the squeeze fired on that sell-off, so upside targets might be limited. I’ll see how this week pans out.

Week of 2/18 Trade Ideas

• AMD (2/20 entry)

  • This has been whippy, but it held the 34ema on a daily closing basis, which kept me in the trade. Momentum turned on the squeeze (went from a red to yellow bar), so still looking bullish. Holding and looking for follow through higher this week.

• ISRG (2/20 entry)

  • Looks great and held up well - holding the daily 21ema. Holding full position.

• JEF (2/21 entry)

  • Looks great and got a little movement upwards. Still hold full position.

That’s it, that’s all. Let me know what you thought of this week’s Sunday Setups!