By Dan Darrow

December 07, 2022

Today's Trade Ideas

Symbol: ANF

Style: Swing

Strategy: Call Spread

Contracts: Jan20 $24 call

Action Area: $1.55 - $1.90

Comments: ANF is a bullish trade. It’s been a long (long) time since ANF has crossed our radar for a trade. Mall Retailers have not been a group we’ve spent much time focusing on the past few years, and many were acting lousy as recently as a couple of months ago, giving no reason to actively trade them. ANF turned in a surprisingly strong beat-and-raise report at the end of November, though, and the large pop to the mid-20s sent the stock through six-month resistance, and momentum carried it above the key 200day sma the following session. ANF has found buyers above that moving average consistently over the past two weeks, and rising support from the 8day ema should lead to a near-term move higher now. Above 24.50, the stock has a clear path into the May earnings gap (26.73), and the Jan20 call will be targeting an initial move to 25.25+ to begin locking in money. The swing trade will have a tight stop below 22.25 or a 30-40% net debit loss, whichever happens first.

Symbol: RBLX

Style: Swing

Strategy: Put Spread


Long Jan20 $30 put

Short Jan20 $22.50 put

Action Area: $2.10 - $2.50

Comments: RBLX is a bearish trade idea. Disappointing earnings in November delivered a blow to the hopes of a sustained rebound, and the sharp drop to the low-30s put the stock in a susceptible position. RBLX bounced the few sessions immediately following its report thanks to the November CPI release, but it failed to reset any moving average support and quickly sank back into the low-30s less than a week later. The stock has started to tighten in a range above 30 as the 8day ema and 20day sma join overhead, with the latter providing downward pressure since the start of this week. A clean break of 30 now should get momentum building for a retest of mid-June support (~25), and the Jan20 put spread will be targeting an initial move to <27.50 to begin locking in money. The swing trade will have a tight stop above 33 (above the 8day ema and 20day sma) or a 30-40% net debit loss, whichever happens first.

On The Radar

NEM hasn’t continued higher this week following its breakout last week, but it has had an encouraging few days of action. NEM has found buyers a1 47 each session this week, establishing support above previous resistance while the 8day ema catches up underneath. The pattern is setting the stock up nicely for a turn higher soon, so it is worth being patient with the Jan20 call spread while the trade develops. GLD is turning back up at the same time, and that should help the position as well. 

XBI needs a bounce soon. Back-to-back bigger down days to start the week put the developing breakout on hold, and now XBI is near key recent support and needs to stabilize quickly. XBI sank back into the 80 level yesterday, where multiple moving averages have converged, and today it found buyers in that range. As long as 79 holds, the bullish thesis stands, but we will need to use that as a technical stop for the Jan20 call spread (there was only a net debit loss to begin with) moving forward.

Open Positions

* The following Open Positions pertain to the Options In Play trade ideas from this and previous editions. Disclosure of the Trader Co-Author’s actual portfolio holdings, as of the date of each publication, is made below under "Trader Author Portfolio Holdings.".

Trader Author Portfolio Holdings

**As of 4pm ET December 07, 2022