Bullish – DG – $179.48
The S&P 500 (SPY) had a strong breakout this week, reaching overbought conditions on the daily RSI. While the market rally has broadened out with healthy sector rotation, we anticipate a short term pullback is likely this week. Additionally, COVID trends have started to reverse higher in a few states.
ZM Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at Dollar General after earnings, with a retest of the $185 support level. With COVID trends ticking higher, social distancing, and working from home will likely extend longer, Dollar General will generally benefit from that. Expecting DG to bounce higher off of $185, Tony suggests buying a July $185/200 Call Debit Spread @ $4.70 Debit. As of Friday’s close, this spread was trading at a $5.15 Debit.
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