By Dan Darrow

November 30, 2022

Today's Trade Ideas

Symbol: MS

Style: Swing

Strategy: Call Spread


Long Jan20 $95 call

Short Jan20 $100 call

Action Area: $1.65 - $1.95

Comments: MS is a bullish trade idea. A strong reaction to the November CPI sent MS running into a critical monthly level, and after a few weeks of sideways action, the stock looks set up for more upside. MS surged into the 91-92 monthly resistance level immediately following the CPI report, and it pumped the brakes before a breakout developed. The base that formed in the high-80s allowed the 8day ema to catch up underneath, and rising support from the moving average, combined with a strong move higher on Powell’s statement today, has the stock setting up for a near-term breakout. Above 92, MS should have a clean path to ~95-96, and if it can clear that level, 100+ is possible. The Jan20 call spread will be targeting an initial move to 95+ to lock in money, and the swing trade will have a tight stop below 88.75 or a 30-40% net debit loss, whichever happens first. 

Symbol: ETSY

Style: Swing

Strategy: Call Fly


Long Dec30 $135 call

Short Dec30 $145 call x2

Long Dec30 $155 call

Action Area: $1.25 - $1.60

Comments: We are going to revisit a bullish strategy on ETSY, but risking only a portion of the gains from the recent trade. The post-earnings breakout through the 200day sma led to a sharp, several-day run into the mid-to-high 120s. The pullback two weeks ago was met with buyers at the 8day ema, and that moving average has continued to provide upward pressure on the stock since. With ETSY now back above 120 (previous August resistance) and through the November high, momentum should kick in and there is an open path to the high-130s/140s. The Dec30 call fly will be a lower debit strategy targeting an initial move to 138+ or a 70%+ net debit gain. The swing trade will use a 30-40% net debit loss as a stop.

On The Radar

ABT looked weak early today, but after a big run in the afternoon, now looks ready for a breakout. ABT slipped back under the 100day sma in morning action as several other big Health Care names were weak, but the big afternoon reversal sent it above that moving average again, and it closed within striking distance of its high from Monday (107.75). If ABT can hold onto the gains tomorrow and continue to build momentum, the 200day sma (109.69) should come quickly. The plan will be to remain patient with the Dec30 call and wait for a move to 109+ to start locking in money. 

UBER is on close watch tomorrow (and Friday). The strong breakout to the 30s a few weeks ago gave a great opportunity to lock in money on the initial Dec16 call, but since that quick move, the stock has been out of play. It has defended the 100day sma well on the recent pullback, and today’s turn higher should be an igniting bar to start another run to the 30s. If UBER fails to continue higher after today’s strong session, though, we will need to manage the Dec16 call spread roll up. The position is out-of-the-money and running low on time, so we will need to decide whether to close the trade or roll out to Jan20 to buy more time based on how it acts the next couple of sessions.

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 30, 2022