With market selloff into the close Friday, leaving deep retracement into demand, we are going to be conservative until we get more clarity.
However, we are watching home builders and retail sectors since have nice bottoming patterns.
Below is a daily chart of PulteGroup, Inc. (PHM).
Trade: Provided it does not trade below $29.81, then over 30-Min. high consider shorting Apr (4/13) $29.5 naked puts (5 DTE) for around closing mid-point of $.36/share.
Technical Setup: Pull back into Bullish Wide Range Bar (+WRB) Breakout after Breakdown Failure at r200-MA daily; sector bottoming.
Option Strategy: Short Puts (SP).
Stop Loss: None for now.
Below is a daily chart of The Home Depot, Inc. (HD).
Trade: Provided it does not trade below $173.35, then over 30-Min. high consider shorting Apr (4/13) $170/165 bull put credit spread (5 DTE) for a limit of $.50/share (closed at $.55/share).
Technical Setup: Pull back into Bullish Wide Range Bar (+WRB) Breakout after Breakdown Failure at r200-MA daily; sector bottoming.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $170.08.
Below is a daily chart of Weight Watchers International, Inc. (WTW).
We will watch for possible Bear Call Credit Spread, will advise Monday.
We nailed the bear call credit spread on VXX last Wednesday on the gap and crap to resistance (corresponding with the SPY bullish gap reversal bar).
Shorting volatility using Master Trader Strategies is a favorite strategy of ours for the Weekly Options Trader because of the severe Contango favoring shorting VIX ETFs on spiked reversals at resistance.
We will be watching for another similar weekly trade on SPY strength.
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All the best,
Greg Capra
Managing Director of Master Trader
Trading the Pristine Method — Origin and End
Dan Gibby
Chief Options Strategist
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