Trade Ideas | December 13, 2018

December 13, 2018

With all the chop right now in the market overall, it's been difficult to come up with quality set-ups for trades using my methodology. I expected volatility to decline in December, which it still might, but hasn't really so far. Anyway, here are this week's trade ideas:

 

$AAPL: The stock has traded down significantly from the highs and I think will probably remain down here near the lows until the next earnings report. Thus a delta neutral trade is in order (Jan25 IC) Watch 185, because a close with volume above 185 could mean a reversal back to 200.

 

$TEVA: The stock is in a descending channel and has just bounced off the bottom of that channel. This means a delta long trade is viable (selling Jan25 puts). Look to take profits at the gap fill at 21 and cut losses at a possible support/channel breakdown at 18.

 

$PFE: Stock has made new highs but will probably maintain the range it has been trading in since late September. Still plenty of room for IV to fall, so again delta neutral (Jan25 Iron Fly) would be a good way to play this.

 

These next few ideas require a little more waiting to see what happens...

 

$GILD: Will be a good candidate for an Iron Fly if this current support level holds. Wait for a bounce!

 

$FB: Currently looks to be bottoming but may stall out near resistance at 155. I want to put on an IC here because I think IV continues to fall, but that doesn't help me if the stock continues to rise. Nothing in my methods tell me this is a screaming long opportunity though, so I'll just wait and if it doesn't pan out, so be it. Don't force trades.

 

$AFL: A huge move up today on a minority investment announcement. Given the stock's frankly wild chop this year (making large swings but ultimately going nowhere), I think a delta neutral trade could be in order here. The only thing is that this could now be a binary event trade and not just a normal short IV trade. I'd give it a day at the very least.

 

 

 

 

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