By Dan Darrow

November 24, 2022

Today's Trade Ideas

Symbol: NKE

Style: Swing

Strategy: Call Spread


Long Dec30 $110 call

Short Dec30 $115 call

Action Area: $1.85 - $2.20

Comments: NKE is a bullish trade idea. Retail has had a solid couple of weeks as earnings have rolled in mostly better than expected (feared), and NKE looks set up well for more upside. The CPI reading drove NKE up through key 50day sma and 100day sma resistance, and the stock has been consolidating above the latter for the past two weeks. With previous August and September resistance now turning into support and the sector rallying following upbeat reports, NKE should turn higher out of its recent consolidation soon, and there is a clear gap from 9/12 at 112.38, which should act as a magnet (the 200day sma is slightly above that level too). The Dec30 call spread will go out through the upcoming earnings report (12/20) and will be targeting an initial move to 110+ to begin locking in money. The swing trade will have a tight stop below 102.25 (under the 100day sma) or a 30-40% net debit loss, whichever happens first.

Symbol: ABT

Style: Swing

Strategy: Long Call

Contracts: Dec30 $107 call

Action Area: $2.30 - $2.80

Comments: ABT is a bullish trade idea. The reaction to ABT’s beat-and-raise in October was lousy, but November has been kinder to the stock, and now it is setting up for more upside. ABT went into the October report at the 100day sma, a key area of resistance throughout 2022, and was quickly knocked lower on the day of the results, with a new 52-week low the following session. The stock has since recovered all of those losses (thanks in part to the CPI reading), and it has been building a two-week bull flag right at the 100day sma. A close above the 100day sma on Tuesday marked the first finish above the moving average since February, and today’s solid follow-through signals the start of a near-term breakout. The Dec30 call spread will be targeting an initial move to 109+ to fill the gap from 9/12 (109.29), and the swing trade will have a tight stop below 101 or a 30-40% net debit loss, whichever happens first.

On The Radar

Tomorrow is weekly Nov25 expiration, and there is one position set to expire: TSLA $250 - $255 call spread. This is the bull portion of a strangle, with the bear portion closed at a gain when the stock broke below 200, and it is far out of the money and unlikely to be in play tomorrow. If the contracts catch a bid, though, I will pass along an update to close the position. 

We are going to tighten the stop on DKNG now. The fast drop on the intraday headline on Monday made for a quick winner on the initial Dec30 put, but since that move lower (and the company’s follow-up statement), the stock has steadily rebounded back near the key 200day sma. Because that moving average is critical for the bear thesis, we will place a technical stop at 16.05 on the current Dec30 put roll down. If DKNG begins to clear the 200day sma, a major breakout may develop, and we want to be sure to be out of the put before that happens. 

ENPH is close to a big breakout. The leading Solar name keeps inching higher, and today’s rally to 324+ came within a few cents of the previous high from September (324.83). ENPH ended up rolling over after the early rally, but it is still near the top of its recent resistance and within striking distance of the year-to-date high. On a clean break of 325 now, ENPH should accelerate into the 330s/340s, so it is worth being patient with the Dec16 call fly roll up as the trade develops. We can tighten the technical stop on the downside to 297 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 November 23, 2022