Neutral – XLK $88.91 – Technology
The S&P 500 (SPY) has stabilized this week despite volatility still remaining near all-time highs. With risks still skewed to the downside as cases continue to grow over the weekend, we position for further weakness while seeking bounce opportunities next week in specific stocks.
TLT Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang suggested that tech companies have further downside in an environment pressured by quarantines. XLK has bounced higher last week and should pull back towards its 200D SMA around $84 support. Expecting XLK to consolidate, Tony suggests selling an April 88/95 Call Vertical @ $3.41 Credit. As of Friday’s close, these calls were trading at $4.35 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: XLK OptionsAction VideoView XLK Trade
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