Bullish – EA – $135.80
Equity markets start this week within the backdrop of global lockdowns and a surge in COVID-19 cases. The S&P 500 and Nasdaq-100 both closed above major support levels after breaking out above previous all-time high resistance levels. SPY’s $365 and QQQ’s $300 are major support levels for equity markets to hold, to continue a bullish trend higher. VIX and VolQ both rose last week before retreating into Friday’s close as stimulus talks continue to progress but a signed bill before Christmas would be a positive surprise.
EA Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang reviewed Electronic Art’s gains recently due to fresh COVID lockdowns nationwide. With communications as one of the strongest sectors in the market, EA has outperformed both the sector and market. Trading at 22x earnings and strong prospects in 2021 with PS5, XBOX and emerging VR/AR technologies gaining traction, EA trades at a discount to peers. Expecting EA continue higher, Tony suggested buying a Jan 29 $135/$145 Call Vertical @ $3.77 Debit.
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