By Dan Darrow
August 17, 2022
Today's Trade Ideas
Symbol: MTCH
Style: Swing
Strategy: Put Spread
Contracts:
Long Sep16 $62.50 put
Short Sep16 $57.50 put
Action Area: $1.35 - $1.70
Comments: MTCH is a bearish trade idea. Having a lousy earnings report and seeing the stock get hit was not unusual this quarter. The stock not going green that session or recovering a few days later was unusual. MTCH was rocked when the company guided for a sizable revenue miss on their 8/02 earnings release, and the stock opened the following morning around 60 and at its worst level since April 2020. The stock did bounce that session and the next couple after it, but the rebound hit a wall at the 8day ema and 20day sma, and those moving averages have remained a sizable area of resistance since then. As MTCH struggles to reset previous support at 69-70 and the 8day ema and 20day sma, it becomes susceptible to a turn lower once momentum across the market cools, and a small move below recent support at 66 should start an acceleration to the downside. The Sep16 put spread will be targeting an initial move to <62 to begin locking in money, and the swing trade will use a tight 40-50% net debit loss as a stop.
Style: Swing
Strategy: Put Spread
Contracts:
Long Sep16 $35 put
Short Sep16 $30 put
Action Area: $1.40 - $1.80
Comments: TDOC is a bearish trade idea. April earnings from TDOC were not good, and July earnings from TDOC were also not good. After cratering on results in April, TDOC failed to make much progress into its earnings gap over the next couple of months, with the strongest rally attempt coming right before the July print. A weak report on 7/27 led to a sharp initial drop to the mid-30s, but the stock found buyers at the key 50day sma to stabilize that session. It has continued to hold the 50day sma as support since that drop, but today’s weakness put it solidly below the moving average, and it should start a near-term breakdown to set up a retest of the earnings day low (32.90). The Sep16 put spread will be targeting an initial move to <33.25 to lock in money, and the swing trade will use a 40-50% net debit loss as a stop.
On The Radar
HYG is at a big level. After rallying into the 100day sma and pausing at the end of July/beginning of August, HYG started to move above the moving average last week on optimism in the high-yield space. Weakness has crept back in across Bonds the past few sessions, however, and HYG has started to turn lower with the group, closing today back at the key 100day sma again. If the ETF begins to lose 77.25-77.50 now, momentum should build on the downside quickly. The Oct21 put has plenty of time until expiration, and the trade is beginning to take shape nicely, so we will be patient with the position and wait for a move to <76.50 to begin locking in money.
Energy has had a choppy start to the week, but MPC has not. With the sector opening weak Monday and spinning around the past two sessions, MPC has shown relative strength as it has already cleared Friday’s high. The 2%+ rally today put the stock within striking distance of the 100 level, and it means we will need to start paying closer attention to the position moving forward. The Sep16 call spread roll up will be looking for a push to 100+ to lock in some more money, and with today’s high being 99.42, a small extension above that tomorrow may give us a shot.
Open Positions
Trader Author Portfolio Holdings
**As of 4pm ET August 12, 2022
