July 6, 2022

Today's Trade Ideas

Symbol: OKTA

Style: Swing

Strategy: Call Spread


Long Aug19 $105 call

Short Aug19 $115 call

Action Area: $3.20 - $3.80

Comments: OKTA is a bullish trade idea. Cybersecurity stocks had a solid quarter, and OKTA needed one in June as the stock was down sharply over the previous couple of months. The beat and raise print sent OKTA to 111+, but the fast gains didn’t stick, and by two weeks later, it had given back the entire move and was probing its May low again. Buyers defended the 80 level well, though, and it has put together a solid rebound as it begins to show signs of turning the corner. OKTA traded through the 50day sma on Monday and the 100 level, and it held above both today on a choppy session. There is an open path now for a retest of the earnings day high (111.35), and momentum should accelerate as it begins to move higher. The Aug19 call spread will be targeting an initial move to 107+ to begin locking in money, and the swing trade will use a 40-50% net debit loss as a stop.

Symbol: KR

Style: Swing

Strategy: Put Spread

Contracts: Aug19 $47 put

Action Area: $1.80 - $2.20

Comments: KR is a bearish trade idea. After a poor reaction to earnings, KR is setting up for a near-term breakdown. KR had decent results when it reported a few weeks ago, but the stock closed red that session, and it dropped more sharply the following day to lose the key 200day sma. It ended up stabilizing quickly after losing the 200day sma, though, but the lack of a meaningful bounce has created a lower range on the stock, and weak action over the past few sessions has put it back under that moving average again. With key support threatening to break, KR should start to pick up momentum on the downside, and the Aug19 put will be targeting a quick initial move to <45.75 (a retest of the post-earnings low) to lock in money. The swing trade will use a tighter-than-normal 30-40% net debit loss as a stop.

On The Radar:

GOOGL is back in business. The stock, along with the overall market, sank into the end of last week, but it has come roaring back this week. GOOGL had a big red to green reversal on Monday, and it built on that bounce today as it pushed above the key 50day sma again. There is now an open path to the late June high ( 2371), so we will be watching for a move to 2350-2360+ to begin locking in money on the Jul29 call spread. 

HACK is at a key spot. The bounce two weeks worked well for the initial Sep16 call, but similar to most of Tech, HACK was unable to hold in the high-40s, and it rolled over before testing the 50day sma. A strong two-day bounce this week has sent the ETF back above 47, and today’s rally put it right at the 50day sma. If HACK can clear 48 now, it should build momentum for a move to 49+, so we will be keeping a close eye on this the next few 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 the date and time of publication