The Tech Stock I’m Watching for a Potential Trade

The Tech Stock I’m Watching for a Potential Trade

Posted On May 5, 2021 4:04 pm

The past few weeks have been a tough trading environment with major indices quietly grinding higher. However, there’s been plenty of turmoil in individual names — under the hood. 

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Yesterday, I shared how I established a bearish position in the S&P 500 Index (SPY) using my patent-pending “triple play” strategy which makes use of weekly expiration dates.  With today’s roll, the cost basis is down from $42.90 to just $0.30, giving us a bear-free trade of significant downside exposure, 

With that in place, I’m starting to look at names for establishing bullish positions. As you can see in the chart below, Tuesday’s sell-off looks like just another one-day blunder by the bears; a spike lower which held support closed at the high and is extending gains today.  Sorry Boo Bear, but El Toro is back in control!

indu dow jones industrial average 2021 chart

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With that said, my watch list is now filling up with buying opportunities.  A top name, and one I haven’t traded in over two years, is Netflix (NFLX), which took a post-earnings dive despite good numbers. 

If it can hold the $500 level over the next few days, I think a quick rise to $520 is the cards.  

netflix nflx nasdaq chart 2021

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.