DailyPlay

Bullish – INCY – $99.37

Catch OptionsPlay’s Chief Strategist, Tony Zhang on CNBC, Options Action every Friday at 5:30 PM EST!

Market Outlook:
The S&P 500 (SPY) started the week strong with accommodative rhetoric from the Fed president and optimism on a COVID-19 vaccine. Despite initially breaking out of a trading range, markets traded mostly sideways with volatility remaining fairly stable and oil stabilizing around $32. With broader participation this week, we remain cautiously bullish, despite continued signs of market exhaustion. 

INCY Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at Biotech company INCY, with Phase 3 trials for their drug Jakafi to suppress the immune response that causes lung damage. With the recent consolidation between $95 and $105, INCY is primed for a breakout higher. Expecting INCY to breakout, Tony suggests buying a July $100/115 Call Debit Spread @ $4.60 Debit. As of Friday’s close, this spread was trading at a $5.00 Debit.

We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: INCY Options Action Trade

The bearish DailyPlay for Friday, May 22nd is Goldman Sachs (GS). GS has rallied 2.34% in the last month and 1m and 6m turned bullish and neutral on May 20th, but remains rangebound with weak relative strength.

Fundamental View

• Lower yields provide a challenging environment for banks & brokerage
• Trading volumes decline with consumer divisions losses mounting
• Earnings July 15th (55 days)

Technical View

• Head & Shoulders formation around $181 resistance
• Weak relative strength score (4 out of 10)
• Rangebound price action, looking for a move lower towards $170

The bullish DailyPlay for Thursday, May 21th is Tractor Supply Company (TSCO). TSCO has rallied 15.74% in the last month and continues to push higher after a recent pullback to $105 support. 

Fundamental View

• Strong Q1 results from “stocking up” during COVID
• Same-day delivery, mobile pickup and curbside delivery across all locations
• Earnings July 23rd (64 days)

Technical View

• Looking for a bounce higher off its $107 support level
• Strong relative strength score (9 out of 10)
• 1M and 6M trends turned bullish on April 17th after break above $93 

Bullish – TGT – $120.94

Catch OptionsPlay’s Chief Strategist, Tony Zhang on CNBC, Options Action every Friday at 5:30 PM EST!

Market Outlook:
The S&P 500 (SPY) took a tumble on Thursday but managed a graceful recovery back to its major equilibrium level of $285 by Friday’s close. With the Fed continuing to support the markets and traders betting that US Treasuries will yield negative interest rates by April 2021, markets have remained resilient in the face of poor economic and corporate profits. 

TGT Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at the retail landscape and potential winners. With a recent breakout above $118, TGT has strong relative strength and support going into earnings next week. Expecting TGT to continue higher, Tony suggests selling a May 29 $121/114 Put Credit Spread @ $2.78 Credit. As of Friday’s close, this spread was trading at a $2.88 Credit.

We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: TGT Options Action

Options Edge: Credit collects 48% of Width

The bullish DailyPlay for Friday, May 15th is Lowe’s Companies Inc (LOW). LOW has rallied 11.4% in the last month and continues to push higher after a recent pullback to $105 support. 

Fundamental View

• BofA Credit Card data shows sustained 20-30% increase in home improvement spending in March & April compared to 2019.
• Analyst revisions point to a small beat on earnings
• Earnings May 20th (6 days)

Technical View

• Bounced higher after pulling back to $105 support
• Strong relative strength score (9 out of 10)
• 1M and 6M trends turned bullish on May 4th after break above $107