Weekend Trader

Weekend Trader Series

January 1, 2023

Open Positions Update

  • Please extend the scheduled time-stop date on the Boeing (BA) February 17, 2023, 175-strike call to Tuesday, January 17.
  • Close the Johnson & Johnson (JNJ) February 17, 2023, 165-strike call on Tuesday, January 03. Close the position at a limit price within the range of the current market price when you place the order.
The following is this week's recommendation:

 First Solar (FSLR)

Place a limit order to buy the First Solar (FSLR) March 17, 2023 140-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, December 30, this option was offered at $20.70. FSLR closed at $149.79 on Friday, December 30.

Do not attempt to enter this position after Monday'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, January 23, close the position.
  • If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Shares of First Solar (FSLR) just pulled back to their 80-day moving average, which is also the site of their early October closing high. This pullback began after the stock moved up to a level that corresponded with its 100% year-to-date mark. Meanwhile, FLSR's lows from last week were still in the area that is four times its 2020 monthly closing low and one-half its April 2008 monthly closing high. Given this solid technical backdrop, we're initiating a new long position on FSLR.
Despite a 70% gain in 2022, analysts remain unconvinced, with 11 still recommending a "hold." First Solar stock has benefited from an upgrade cycle, which could continue in 2023. Short interest stands 45% above its May lows and accounts for 4% of the stock's available float, which suggests a good number of shorts are underwater and may move to cover on pullbacks like we're seeing now.

The stock's high Schaeffer's Volatility Scorecard (SVS) tally of 89 (out of 100) indicates the stock tends to outperform volatility expectations. Our recommended March 140 call has a leverage ratio of 4.85, and will double on a 21.1% pop in the underlying shares.

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