Weekend Trader

Weekend Trader Series

January 15, 2023

Open Positions Update

  • The First Solar (FSLR) March 17, 2023, 140-strike call was closed after hitting its target profit of +100%. If you have not already done so, please close out of your FSLR position at the earliest opportunity.
  • Close the Charles Schwab (SCHW) February 17, 2023, 70-strike call on Tuesday, January 17. Close the position at a limit price within the range of the current market price when you place the order.
  • The PENN Entertainment (PENN) February 17, 2023, 35-strike put reaches its time-stop this Tuesday, January 17. Close the position at a limit price within range of the current market price when you place the order.

The following is this week's recommendation:


 Nasdaq (NDAQ)

Place a limit order to buy the Nasdaq (NDAQ) March 17, 2023 56.67-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, January 13, this option was offered at $8.60. NDAQ closed at $63.35 on Friday, January 13.

Do not attempt to enter this position after Tuesday's close.

Please use the following guidelines to manage the position:
  • Exit the position if the option is at a 100% gain from your entry price.
  • If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, February 13, close the position.
  • If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.

Nasdaq (NDAQ) has layers of technical support in place on the charts. The stock has pulled back to a trendline connecting monthly lows since the pullback to its 36-month moving average in May/June of last year. This 36-month trendline has also marked multiple lows since 2011. Furthermore, this pullback has the stock running into its 24-month moving average, which contained its September/October lows.
 
Earlier this week, NDAQ moved back above a trendline connecting lower highs since last year’s peak. The shares also broke above their 20-day moving average, which served as resistance in mid December.

 
It’s worth noting that the stock’s post-earnings movement has been bullish following its last two reports, as Nasdaq is gearing up for earnings on Jan. 25. Plus, the company will make an appearance at Credit Suisse Financial Services Forum on Feb. 13.
 
There is plenty of room for optimism amongst the brokerage bunch, despite NDAQ’s modest year-over-year gain, which could provide tailwinds. Of the 19 analysts in coverage, nine carry a “hold” or worse rating.
 
Nasdaq stock’s Schaeffer’s Volatility Scorecard (SVS) ranks at a 96 out of 100 and has been high since May, suggesting options have been underpriced relative to direction. Our recommended March 56.57-strike call has a leverage ratio of 6.8, and will double on a 14.5% rise in the underlying shares.  

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