July 20 Weekend Review

Bflakaz Weekend Review

July 20, 2014

Recap of Previous Week's Trades

• VIX +10 11/12 SEP14 call spread @ 0.50, out @ 0.95, profit = $450
• AAPL +1 92.5/95 SEP14 put spread @ 1.20, out @ 1.35, profit = $15
• FCX +4 37/38 SEP14 put spread @ 0.45, out @ 0.40, loss = -$20

Management of Current Positions

There are no current positions.

Trade Setups for the Upcoming Week

TWTR

TWTR current IV is around 60%, making it a candidate for credit spreads, not debit spreads. They report earnings on 7/29, next Tuesday, after the market closes. TWTR has good support at the 35 area, and also has found support on that bottom BB recently. It looks like it could be making a double bottom and will head higher to perhaps 39.2X, where the 20sma stands. Additionally, TWTR should found strong support at the 50sma on Friday. Here's the trade: Sell AUG14 34/35 put spread for 0.39 (as of writing)

Z

Z is selling off a little right now, but it's bumping on the bottom BB and approaching the 50sma, where it has found good support numerous times. One could argue that it is forming a head-and-shoulders pattern, but I wouldn't back that up. Those patterns tend to have "longer durations," i.e. the heads and shoulders form over a period of weeks, not days. This name has horrible liquidity in its options, so I'd rather buy a few shares.

Wait a few days... just to make sure support is found and its not a h+s.