DailyPlay – Portfolio Review – May 10, 2024
DailyPlay Portfolio Review Investment Rationale As buyers...
Read MoreStrategy: Long Call
Direction: Bullish
Details: Buy to Open 3 Contracts Feb 16th $155 Calls @ $6.15 Debit per contract.
Total Risk: This trade has a max risk of $1,845 (3 Contracts x $615) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $615 to select the # contracts for your portfolio.
Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher.
1M/6M Trends: Bullish/Neutral
Relative Strength: 4/10
OptionsPlay Score: 88
Stop Loss: @ $3.08 Credit. 50% loss on premium paid)
Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade.
Please note that these prices are based on Thursday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry.
Investment Rationale
As we end the week, we will be closing our TLT position that was opened a few days ago after the price has rallied significantly after the Fed meeting. TLT has now closed in on our price target of $100 and while we maintain our bullish thesis, we will be waiting for any pullbacks for additional long entries.
Our bullish DailyPlay today is Johnson & Johnson ($JNJ). Price is showing signs of capitulation as momentum swings positive. Additionally, JNJ has experienced a pullback to the low $150s and has found support which provides an excellent risk/reward long position. We will be targeting the Feb monthly contract and the trade structure is a long call as we expect a sharp bullish move. This allows for plenty of upside as the next resistance level sits at the $170 area.
We will look to Buy the Feb 16th $155 Call @ $6.15 Debit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 3 Contracts for a risk of $1,845. We will set a stop loss on the spread at around 50% loss of the premium paid @ $3.08 Credit.
JNJ – Daily
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