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This Week’s Swing Ideas

Hi Everyone,

To our new members, WELCOME to the NINJA Tribe.  Be sure to watch this week’s swing ideas video with detailed explanation of our top 4 ideas as well as several bonus ideas–>>> This Week’s Video
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Our swings continue to perform nicely.  Congrats to those who have been taking advantage of these ideas. However, with the pandemic still upon us, please be sure to trade with EXTREME CAUTION!  I would not be attached to either direction.  Even consider sitting on the sidelines if you are new or haven’t quite mastered discipline yet and wait until the dust settles.  Also, be sure to do your weekly trade journal analysis BEFORE you trade so you can make any necessary adjustments to your trading this week.

OK, let’s look at my top 4 ideas for this week.  If you don’t already, consider using an intraday trigger for entries.  I like to use the 8/34 EMA Cross to the upside for longs.  You can also use the reverse for shorts.  For swings, consider using an intraday chart cross i.e.: 15-, 30- or 60-min charts.  Remember, for each trade idea, do your own due diligence and always trade with extreme caution!

Note that you don’t have to choose the same options listed below.  You’ll want to be sure to stay within your own risk tolerance and portfolio size allocation.  For less volatile price movements in your options, consider going further out of the money and/or further out on your expiration date.  In general, the further out of the money you go, the lower the delta and theta which contributes to less volatility in your option value.  The further out you go on your expiration date, the lower the theta which means less time decay should you want to hold your options longer than a day or two.  Be aware that the delta and theta values fluctuate during market hours.

Keep in mind that you don’t need a big move in the stock to have a big move in your option, up or down!  I try to keep my profit targets at about a $2+/- move in the underlying stock depending on the pattern, my entry, and target on the stock chart.  Be sure to have your own trade plan BEFORE you enter a trade depending on the direction, your entry and duration of your trade!

It’s a good idea to use bracket or OCO (one cancels all, where you can put both your profit and stop targets on one order) orders (if your trading platform has this capability) if you can’t monitor your position(s) intraday.  At the very least you may want to set alerts for yourself at certain price levels in the stock, so you’ll have time to make any necessary decisions on your position(s).

Be sure to check the BONUS list at the bottom of this email for several other potential trades.  I cover several of the bonus ideas on this week’s video.  Keep in mind we are still in a headline/tweet driven market environment.  Extreme caution is always warranted!

Have a great rest of your weekend everyone.
DH

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Z – Zillow Group, Inc. – Internet Content & Information – USA

entered the pinball pattern on Fri, closing over the 20 SMA.  Z shares were up almost 11% yesterday since they’ve sold and/or entered agreements to sell more than half of their homes inventory from the IBuying program and have authorized their $750M share repurchase program.  Technically, above symmetry, could see the move toward the 34 EMA for completion of the pinball.  Note upper fib levels as potential resistance along the way.  There are still several class action lawsuits on this one, so be careful if going long.

To the downside, if can’t break above this symmetry, could see a pullback toward the multiple bottom zone with the 8 EMA  and lower fib series as potential support along the way.  Remember, ALWAYS check your intraday charts and signals to determine highest probability short-term direction and help with timing your entries and exits BEFORE executing an idea!

Trade Idea – Movement of the Underlying Stock:

CALLS
Entry Zones:   $60.75+ (above upper symmetry), $62.75+ (above upper 127.2)
Profit Zones:   $62.25+/-, $64.75+/- areas, depending on your entry and duration
Stop Zone:      $60- area, close below upper symmetry, depending on entry and duration

Option Trade Idea:  Jan 21 $65 Calls         $3.65 / $3.80        Delta .42 / Theta -.06

PUTS
Entry Zone:     $59- (below 20 SMA)
Profit Zone:     $57+/- area, depending on your entry and duration
Stop Zone:      $60+/- area, close above 20 SMA, depending on entry and duration

Option Trade Idea:  Jan 21 $55 Puts         $3.30 / $3.50        Delta .31 / Theta -.05

Option Profit Zone:         10 – 50%+ depending on your entry and duration
Option Stop Zone:          5 – 25%+/- depending on your entry and duration

LOW – Lowe’s Companies, Inc. – Home Improvement Retail – USA

LOW is in a royal pattern on daily.  Had a nice run up after earnings beat in November.  Fri gapped up to upper 161.8 and dropped, bouncing off lower symmetry.  Could see a move back toward $256 ATH with current and another upper fib series as potential resistance along the way.  Potential catalyst on December 15th, Lowe’s 2022 Financial Outlook event, 8am EST according to website.

To the downside, if can’t hold above the 8 EMA on daily, could see a move toward the lower 161.8 fib ext that lines up with 20 SMA.  Remember, ALWAYS check your intraday charts and signals to determine highest probability short-term direction and help with timing your entries and exits BEFORE executing an idea!

Trade Idea – Movement of the Underlying Stock:

CALLS
Entry Zones:   $249+ (above Fri close), $252+ (above upper 127.2)
Profit Zones:   $250+/-, $253+/- areas, depending on your entry and duration
Stop Zone:      $55.25- area, close below Fri close, depending on entry and duration

Option Trade Idea:  Dec 17 $250 Calls         $5.70 / $5.95        Delta .48 / Theta -.25

PUTS
Entry Zone:     $55.25- (below Fri close)
Profit Zone:     $53.50+/- area, depending on your entry and duration
Stop Zone:      $55.75+/- area, close above Fri close, depending on entry and duration

Option Trade Idea:  Dec 17 $240 Puts         $3.45 / $3.60        Delta .30 / Theta -.24
NOTE:  Higher theta on puts, consider going out to January if buying puts.

Option Profit Zone:         10 – 50%+ depending on your entry and duration
Option Stop Zone:          5 – 25%+/- depending on your entry and duration

PYPL – PayPal Holdings, Inc. – Credit Services – USA

PYPL is another one hanging around below that 8 EMA on daily.  Above this zone, it sets up a potential pinball.  Has to close above the 8 EMA to be in pinball pattern.  If sets up pinball, could see a move toward 34 EMA with upper fib series, 20SMA and $200 psychological level as potential resistance along the way.

To the downside, if can’t hold above lower symmetry, could see a move toward lower 161.8 fib ext with lower fib series as potential support along the way.  Note potential catalyst on December 7th, Goldman Sachs US Financial Services Conference.  Again, ALWAYS check your intraday charts and signals to determine highest probability short-term direction and help with timing your entries and exits BEFORE executing an idea!

Trade Idea – Movement of the Underlying Stock:

CALLS
Entry Zones:  $184.25+ (above Fri close), $186+ (above upper symmetry), 187.50+ (above upper 127.2)
Profit Zones:  $185.50+/-, $187+/-, $189.50 +/-areas, depending on your entry and duration
Stop Zone:     $183.75+/- area, close below Fri close, depending on entry and duration

Option Trade Idea:  Dec 23 $190 Calls     $7.35 / $7.85      Delta .43 / Theta -.19

PUTS
Entry Zone:   $183.75- (below Fri close), $181,50- (below lower symm), $179.75 (below lower 127.2)
Profit Zone:   $181.75+/-, $180.25+/-, $178.25+/- areas, depending on your entry and duration
Stop Zone:    $184.25+ area, close above Fri close, depending on entry and duration

Option Trade Idea:  Dec 23 $180 Puts    $8.55 / $8.95       Delta .42 / Theta -.19

Option Profit Zone:         5 – 50%+ depending on your entry and duration
Option Stop Zone:          2.5 – 25%+/- depending on your entry and duration

 

CHGG – Chegg, Inc. – Education & Training Services – USA

CHGG is also in a pinball pattern.  To the upside, if stays above 20 SMA, could see the move toward 34 EMA with a 2 or 3 fib series as potential resistance along the way.  Lower ATR, slower mover in general, which makes for tighter resistance zones.  May need to hold through some chop on this one.  Potential catalysts on December 7th, Raymond James Tech Investors Conference and on January 12th, Needham Growth Conference.  Also note that there are ongoing investigation notices out for possible securities violations.  Trade with extra caution.

To the downside, if drops back below the 8 EMA, could see a move toward recent $24.25 low.  Remember, ALWAYS check your intraday charts and signals to determine highest probability short-term direction and help with timing your entries and exits BEFORE executing an idea!

Trade Idea – Movement of the Underlying Stock:

CALLS
Entry Zone:     $28.75+ (above Fri close)
Profit Zone:     $29.75+/- area (note upper fibs as pot resist), depending on your entry and duration
Stop Zone:      $28.25- area, close below Fri close, depending on entry and duration

Option Trade Idea:  Jan 21 $30 Calls      $2.20 / $2.30        Delta .47 / Theta -.03

PUTS
Entry Zone:    $28.25- (below Fri close)
Profit Zone:    $27.25+/- area (note lower symm & 8 EMA as pot support), depending on your entry and duration
Stop Zone:     $28.75+/- area, close above Fri close, depending on entry and duration

Option Trade Idea:  Jan 21 $30 Puts        $3.50 / $3.70        Delta .53 / Theta -.03

Option Profit Zone:         10 – 50%+ depending on your entry and duration
Option Stop Zone:          5 – 25%+/- depending on your entry and duration

 

BONUS IDEAS: Others for you to watch, moving averages on the daily charts. CHECK THOSE EARNING DATES BEFORE TAKING A TRADE. Although I don’t send alerts or updates on these, I do cover several of them in this week’s video, so be sure to watch. There are setups there that you can check out, do your own diligence, and trade if you choose.

Watch over the 8 EMA:  AAPL, DELL, HD, PFE, PG

Watch over the 50 SMA:  AWK, SBLK, TGT, WFG

Watch over the 100 SMA: ABB, AEE, KMB, LH, PBR

Potential Fib Retracements: MRVL, SMAR, TLYS, TNDM

Potential Puts:  BABA, CRWD, ESTC, SQ, ZM

Potential RBBs:  CVAC, EVOP, HIMX, XRX

Potential Pinballs: BALY, EHTH, LTRPA, TPIC, ZG

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