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All Star Charts

Expert technical analysis of financial markets by JC Parets

[Options] Looking For a Quick Hit

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To quote our Head Technical Analyst at All Star Charts, Steve Strazza: “Bullish setups are hard to come by these days.”

Yeah.

But, for those willing to venture into the choppy waters, recent market action has provided us with some nearby risk management levels that give us the opportunity to act quickly if we’re wrong, limiting our losses while giving us multiples of potential profit (as measured against the risk).

And today’s idea comes from the only sector to show YTD gains this year.

What’s not to like about that?

[Read more…]

[Options Premium] Surviving the Test

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Stocks are heavy out there. Everything is getting sold (except Coca-Cola $KO).

But even in selling down, strong stocks and future winners can and will begin to reveal themselves, first through relative strength.

Today’s idea, while down on the day like everything else, is a stock that has been quietly gathering relative strength for some time now. And if we think the selling pressure in the broader markets is close to exhausting itself, this International stock may be one of the next leaders when markets calm down. [Read more…]

[Options Premium] Letting Some Fizz Out.

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Well helloooo again volatility! It’s been an interesting week.

There are not a whole lot of charts out there that have me too excited to put any aggressive risk on here. But thanks to the jump in volatility, we do have an opportunity to sell some premium in a staple with a nearby risk management level that should help keep losses minimal if we’re wrong.

So let’s get right to it! [Read more…]

[Options] A Discretionary Fade

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It’s been a minute since we’ve put some delta-neutral credit spreads on. And while VIX is off its highest levels of the year, there is still plenty of elevated premium in pockets.

The team here at All Star Charts has been monitoring the elevated options premiums in the Consumer Discretionary space. The $XLY ETF has been persistently hanging around the top of our implied volatility lists for the last couple of months. We talked about it yesterday during the @allstarcharts live twitter spaces chat.

And I like having a few delta-neutral trades on to provide some portfolio balance against my bullish and bearish directional bets in individual stock names. So $XLY is providing us a good opportunity to collect some income.
[Read more…]

[Options Premium] “Cop”-ping to Another Energy Play

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We go where the strength is.

And until new information presents itself to get us looking elsewhere, the strongest names, best bases, and most impressive relative strength continue to be found in the energy space. Who am I to fight the facts?

Today’s trade is in an Oil & Gas company that has been in an unrelenting uptrend since mid-2020 that is showing no signs of reversing.

[Read more…]

[Options Premium] Chemistry

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Chemicals and Fertilizing stocks have been among the sectors that seem to be “benefiting” from supply shocks in the system stemming from the war in Ukraine, as well as just general inflation touching the price of everything (except tech stocks, heyooooooooo!)

The team put out a “Trade of the Week” last week in this sector that now has my attention as the stock has held on to recent gains.

Stocks in the right sectors, making multi-year highs are stocks I can’t ignore.

[Read more…]

[Options] Managing Our Long CTVA June Calls

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Mea Culpa — I’m letting this post stand because it offers two good lessons for traders:

1. The risk management laid out below is how I manage long calls heading into expiration. So anyone holding a similar position will benefit from this or a similar risk management plan.

2. It offers a lesson on keeping good records. I messed up. For ASO subscribers, we’re actually in the September calls, NOT JUNE CALLS. We have plenty of time until our position expires and therefore we actually don’t need to do anything here yet but enjoy our #FreeRide. The confusion for me is that I also have June calls on in my personal portfolio and I did not take careful notes in my personal spreadsheet. And when reviewing, I accidentally confused these June calls as part of the position we put on for ASO. So, yes, I personally will be exiting my June calls soon (as laid out below). But for those of you who followed me into our September calls trade, we’ve got time. 

Sorry about the confusion.

 

 

Hello everyone! It’s the beginning of the month and during this time, I always review any open positions that have options expiring in this new month.

I reviewed our open positions with June options (LNG and MAIN) in this week’s Options Jam Session video for ASO subscribers (bookmark that link!), but I failed to mention our long June 60-strike calls in $CTVA! Somehow, it slipped my radar when I was putting this week’s presentation together.

So let me catch you up on what’s happening with this winning trade here. [Read more…]

[Options] Prepared for a Zoom in Either Direction

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We play with the cards we are dealt. There is nothing else we can do. We cannot employ willpower to create market conditions into being the way we’d prefer them to be. They are what they are, it is what it is. So we work with what we’ve got.

And what we’ve got right now are a bunch of badly beaten up stocks. Many still off 60%+ from their recent highs.

Dumpster diving isn’t my favorite way to find new ideas to trade. But my man Strazza enjoys the exercise from time to time and recently, he’s uncovered some notable insider buying and unusual options activity in some former highflyers, most notably Zoom $ZM.

But first, let’s survey the damage. This probably isn’t new to many of you, but look how far ZM has fallen from its recent perch atop Momentum Mountain: [Read more…]

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