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Last week finished on a high note for the Nasdaq, tech and semiconductors. $QQQ is almost back to the 50MA as well as SOXL is currently at the 50MA on the day chart. Also the 10 year treasury yield has pulled back to 1.66%, and overall not showing a clear sign of which direction it will be moving. Since March 17th, it has been trading around the current level. I'm not convinced that it will move to much beyond 1.7%. If I am right, this will benefit tech and growth the most.
Of course, with the economy opening up, we need a couple recovery plays. Overall, I think most investors are a little to hopeful with how well future earnings will be. For example, airline stocks are overbought right now. It is my opinion that even though people will have the ability to travel more this summer, there won't necessarily be a huge surge in business travelers now that they are use to Zoom conferencing and most likely have reduced their travel budgets. My general opinion is that the rotation into cyclicals and re-opening plays are starting to be overbought. Nevertheless, I do like two sectors - gambling and credit cards.
Mentions for the Week:
$BJK: The VanEck Vectors Gaming is a Gaming ETF that includes casinos and casino hotels, sports betting (including internet gambling and racetracks) and lottery services as well as gaming services, gaming technology and gaming equipment. Most notable holdings include, Las Vegas Sands, Draft Kings, MGM, Caesars, Sands China etc.
With Las Vegas opening up, and this summer at a high for the year, this is a safe and excellent choice. I first wrote about this one on my post for the Week of March 26, and my view is still relatively the same although it has started moving up from my buy zone as predicted. In general I like options expiring in the fall of this year at minimum. A vertical spread around. A $60/70 spread currently is only going to cost $168.
Target Price: $70
Timeframe: 4-6 months
$MA: Mastercard Incorporated is an American multinational financial services corporation, and I believe that when the economy is opening up, Americans will be spending more on their credit cards. This pick is also another no-brainer for myself, especially coming off of a trip to the 50MA on the day chart. I'd give this a low risk score of a 2, just be careful when choosing your expiration on options - make sure you have enough time for anything unexpected. Vertical spreads are also appealing here, as you can save a lot of capital to further diversify.
Target Price: $413
Timeframe: 2-4 months
VanEck Vectors Social Sentiment ETF (the “Fund”) seeks to track as closely as possible, before fees and expenses, the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index (the “Sentiment Leaders Index”). Although $BUZZ is a new ETF, I do believe that it will outperform other ETFs during the reopening period this year because it has a mix of re-opening plays and growth/tech plays.
It has made all that much progress since launching and is in my opinion a good buy right now. I'm mostly interested in commons or longer term call options as this one will take some time to develop and mature, although I do think that it can double in due time.
Target Price: $50
Timeframe: 4-6 months
$NIKE: As you probably have heard, Nike has come under pressure from Chinese netizens along with a handful of other foreign companies in the Middle Kingdom. It all stemmed from a ban on Xinjiang cotton. Xinjiang is a province in far NW China which is home to Uyghurs ethnic minority. Although Nike first spoke out against the Xinjiang forced labor last November, for some reason the Chinese are just getting angry about it. Currently, I live in Shanghai and I can tell you that this started blowing up last week; it was huge news online. However, stores are open and I can confirm I still see many people wearing Nike and Adidas shoes on the streets. In my opinion, it is just theatrics and the online anger will die down sooner than later. I like Nike as a buy right now, although a little riskier given current conditions.
I'm going with a shorter term call on this, possibly a spread to reduce risk. I do believe that it will jump back up to the $145 level relatively soon once this blows over. Just with the negative press in China, $NIKE dropped to it's 180MA on the day chart.
Target Price: $145
Risk: 4-5 (depending on expiration)
Timeframe: 1-2 months
$ARKX: The ARK Space Exploration ETF and Emerge ARK Space Exploration ETF are set to list concurrently on Tuesday, March 30. It is the first product launched by Cathie Wood and the ARK team in two years and the markets have been eagerly anticipating this moment. As far as the holdings, we won't know until the first week of April.
I really do think that this is going to be a huge moment in time for Ark Invest and Cathie Wood. Space is the future, and companies will have an increasing demand for launching Earth Orbital Vehicles, satellites or other going forward. Not to mention the popularizing and romanticizing of space, once again, by Space X. The biggest question for myself is, "How much money will I buy $ARKX with?", or actually, "How much money do I have left to buy $ARKX with?". I'll be buying as soon as I can, and I'm thinking of putting $20-30,000 into this in commons or LEAPS. No matter which, $ARKX is a long term play for me, and I believe this will be printing money in the next 5-10 years.
Note: Risk (1 out of 5) is my opinion of how risky the stock and these plays are; 1 being the lowest and 5 is the highest.
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