Is it irrational exuberance or just defying gravity? Whatever the reason, this market refuses to pull back in a significant way and appears to be ready to drive higher. We cannot argue with today’s price action, so want to get some long exposure with the trades below. We certainly are concerned about the potential for a breakout failure in this market. However, we have to go with what is and we will manage accordingly.
Below is a daily chart of SPDR S&P 500 ETF (SPY).
Trade: Over $249.30, consider buying Sep (9/22) $243 calls (16 DTE) for a limit of $6.45 (which is paying only $.15/share time value, and we will look to leg into a Bull Diagonal).
Technical Setup: Bullish Gap and Breakout daily and weekly, strong uptrend monthly to new highs. Note: With all the daily Topping Tails, if it trades over them, the breakout should be more convincing and potent with the multiple time frames being in alignment.
Option Strategy: Long Calls (LC).
Stop Loss: $247.98.
Below is a daily chart of Barracuda Networks, Inc. (CUDA).
Trade: Over $24.50, consider buying stock. Note: Earnings 10/9.
Technical Setup: Secondary Breakout daily and weekly after bullish consolidation, bullish monthly with Price Void above all time frames.
Below is a monthly chart of CUDA showing that it has a lot of upside potential as a longer-term trade, which we will monitor.
Stop Loss: $23.88.
Below is a daily chart of Alibaba Group Holding Limited (BABA).
Trade: Over $174.20, consider buying Sep (9/22) $162.5/177.5 bull call spread (10 DTE) for closing mid-point of $10.35/share.
Technical Setup: Breakout daily from bullish consolidation (notice the Railroad Rising 20/50-MA, a sign of strength), bullish weekly and monthly.
Option Strategy: Bull Call Debit Spread (BCS).
Stop Loss: $167.88.
Adjustments and Comments on Open Advisory Letter Trades Note: Our Trade Updates are timely posted in a separate Report in the Member’s Area. Please see that document for a current reflection on all Open and Closed Trades since the spreadsheet updates immediately and will always be more current than this e-mail update. Thank you.
NOTE: Please see Master Trader Guidelines for Trading the Open and Gaps in Member’s Area for rules on trade entry, gaps, etc.
Below is a link to individual videos explaining in greater detail the definitions of the main option trading strategies used in the Master Trader Option Strategies Series for Investors and Active Traders to generate wealth and income.
Description of Master Trader Directional and Income Option Trades can be seen HERE
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director of Master Trader
Pristine’s Founder and Creator of the Pristine Method
Dan Gibby
Chief Options Strategist
Follow Greg on Twitter, YouTube, and StockTwits to get real-time updates and education:
Twitter: @GregCapra
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NOTE: Master Trader will show opening and closing prices of all stock and option trades. We do not recommend proper share size for your particular trading style, risk tolerance, or account balance. We urge you to calculate your own share size based on your individualized risk parameters, Trading Plan, and familiarity with the proposed trade strategy and risk.
NOTE: Master Trader and its representatives might have existing positions in these and other trade recommendations before or after suggested herein. Additionally, we often manage them differently for internal purposes based on different risk parameters than noted herein.
