By Dan Darrow

November 15, 2022

Today's Trade Ideas

Symbol: BKR

Style: Swing

Strategy: Long Call

Contracts: Dec16 $31 call

Action Area: $1.35 - $1.75

Comments: We are going to revisit BKR for a bullish trade. The catch-up play post-earnings worked well on BKR, and the last of the trade was closed when the stock pushed into the 200day sma earlier in November. BKR ended up continuing its run higher through the 200day sma and into the low-30s, with the gap up Friday and reversal lower on Monday, marking a near-term pause in the rally. The stock has found buyers at the 8day ema throughout its recent run, and with the moving average now crossing above the key 200day sma, momentum looks set to continue to the upside. BKR has an open path to the high-30s to retest levels from June, and the Dec16 call will be targeting an initial move to 33+ to begin locking in money. The swing trade will use a 30-40% net debit loss as a stop.

Symbol: ENPH

Style: Swing

Strategy: Call Spread


Long Dec16 $320 call

Short Dec16 $330 call

Action Area: $3.10 - $3.80

Comments: ENPH is a bullish trade idea. Leading Solar name ENPH is setting up for a near-term breakout. The company delivered another strong beat-and-raise print at the end of October, helping drive the stock back above 300 and key previous resistance at 310-315. Momentum stalled before delivering a breakout in October, and the first week of November saw the stock retrace back into the 260s, but ENPH found buyers at the 100day sma and quickly rebounded post-CPI last week. Following a positive analyst note this morning, ENPH is now back within striking distance of the 310-315 resistance range again, and rising support from the 8day ema and continued strength across the Solar sector should lead to a near-term breakout and extension higher. The Dec16 call spread will be targeting an initial move to 320+ to begin locking in money, and the swing trade will use a 30-40% net debit loss as a stop. 

On The Radar

THC will be on close watch the next couple of sessions. Like many stocks last week, THC caught a bid post-CPI, with the move from ~38 on Wednesday to 44+ on Friday, repairing the chart. THC reclaimed the 8day ema and 20day sma on Friday’s rally, and while it was under pressure on Monday, today’s bounce helped it stabilize above the 20day sma again. If THC doesn’t roll over quickly, it could begin to build momentum for a retest of the November high (46.41), and that would change the thesis for the bearish Dec16 put spread strategy. Money has already been locked in on the trade, but we will need to place a tight technical stop at 45 on the remainder of the position moving forward.

The GSK Nov18 call spread roll up has lost most of its value as the stock has been spinning around for the past two weeks, and with only a few days until expiration, we need to pay close attention to the position. The stock is attempting to hold the uptrend that began in October, with back-to-back tests of the 50day sma finding buyers recently, but it is also struggling to turn the corner higher above the 8day ema and 20day sma. The plan over the next 2-3 sessions will be to see if GSK can reset above 32.50 (above the 8day ema and 20day sma). If so, we may open a December or January option position to ride momentum to the upside. If it fails to reset above 32.50 by Thursday, we will salvage whatever premium is possible on the Nov18 call spread. 

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 November 14, 2022