Russell 2000 ETF (IWM) – Small Caps Breakout – Dec 30th, 2019
Bullish – IWM $165.86 – Small Caps
The S&P 500 (SPY) continues its march to all-time highs with only 2 trading sessions left in the year and nearly 30% gains. With strong economic numbers and an accommodative Fed, we expect markets to stay elevated. Despite strong momentum and relative strength, we see a high risk of a 5-7% pullback in the new year.
IWM Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang, Chief Strategist of OptionsPlay suggested that small caps are a better place to look for gains in 2020. After underperformance for almost 2 years, IWM has started to break out on an absolute and relative basis. Tony Zhang, expecting IWN to pull back and then rally, suggesting selling a Jan 164 Put @ $1.32 Credit. As of Friday’s close, these calls were trading at $1.46 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: IWM OptionsAction Trade
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