NFLX – Consolidation Pattern
After running up to earnings and reaching overbought daily levels, NFLX failed to continue it’s move upwards on it’s earnings report. It’s in a consolidation pattern with hard support at 190.50 and a light resistance level at $200.50. As time moves forward it should start to tighten it’s range a little bit between the lower trend line and that $200.50 resistance. When the volume comes in after the tightening it’s going to break up or break down in fantastic fashion. I’m willing to make the upward directional bet when it gets into this range. If it wants to break out beforehand we’re going to look for confirmation before entering the trade.
CACC – Possible breakdown
CACC is testing support at about the $280 level, which is also the 50MA on the daily chart. If it loses this support it’s looking to test the $263-264 level. Options are somewhat expensive, so at a convincing break of support on volume I’ll look to enter a $260 put calendar. If there’s not enough time left before 17th when this happens, it’ll likely turn into a 270/260 vertical put spread.
YELP – Looking for breakout
It was sold off after earnings, but still stayed inside the 10/30 bar. So long as it holds that level it’s undoubtedly still in a bullish stance. At the next test of $45.50 it may be worth a couple of NOV 24 45.5 or 46 long calls. The minimum price target would be $47, but the real goal of this is to catch the breakout for upper trend line kiss. The biggest risk I see in this trade is time decay with no clear catalyst on the way.
TEAM – Cup and handle breakout
This is the most promising item on the watch list. Volume confirmation of breakout in all the right places, and it’s even coming back to test $51 before going up. On a successfull $51 test we’re going to go long with an ITM call option, NOV 17 50C. The 55 is too risky because it’ll be really sensitive to time decay if there’s any delay in getting to the price target of $55-$56. This one is pretty straight forward, bullish on daily and hourly charts.
BABA – Test of $181
Call me crazy but I like BABA to be down Monday to the $181 level. The 30 minute chart shows a falling wedge, which will most likely break upward, but when we pair this with the daily chart I like it to touch the bottom of that wedge just one more time because it would really neatly make all the daily and intra day charts coincide with one another. I am currently short one contract NOV 10 180P (this was a day trade that got away from me). I’m looking to close this out around the $181 level for what will likely be a small loss considering time decay. After this touch of stronger support, I think it goes sideways for a couple days while deciding if it’s going to continue up or down. It could be worth a strangle as the price target would be $190 or $174 depending on which ways it goes. I’m in the $190 camp, but we’ll wait for pattern.