OptionsRising

Strong bullish candle pattern, a Pullback, now Swing Calls

Long
OptionsRising Updated   
NASDAQ:AMD   Advanced Micro Devices Inc
Markets could be chopping today to base for an upside rally. 27May calls at 105 and 110 strikes are worth a great reward/risk trade. This stock did not sell off as much as others yesterday and I am looking for buyers to come in with force if markets rally.
I really like the daily technicals - RSI 5 is over RSI 14 and stochastics are great for more upside. Chart shows a regression of 1 stand. dev. so price must stay over and move up to yellow line if this trade works.

Right now there is over 90,000 volume in the weekly 100 strike with 31,000 OI. Based on price action post-earnings, this stock would already be over 110 but broad market selling brought it down. NVDA earnings are on 25May and expected to beat - if it does then AMD stock may get a further boost. I may exit or trim position if price does not move over 98.80 before close today.

Comment:
Since this is a short-term swing trade, this trade idea based on the daily chart will be negated for me if the 30min chart becomes more bearish (price cannot hold over 98-97.70
Comment:
Had to change my update because price broke 97.30 small support just after I posted. 30min chart is bearish but I like daily enough to keep some calls since I have next week's expiry. There has been much unusual options activity this week.
Trade active:
Near open I am looking for price to hold over 98.50, 50sma, on 30min chart. AMD has had some positive write-ups that support bullish sentiment. I may make a day trade and/or add to the small swing position I started yesterday (27May 110 calls @ $0.53)
Trade closed manually:
Well that did not last long - premarket was very different from opening. I sold the calls for 20cents. I held them through the morning drop to see if price would bounce. I could easily do this because with only two contracts my real loss is only $66. This is why position size is so important. With market volatility I did not want to sell next week's expiry only to have a sudden turnaround, so I held it longer than I would have with a regular position size.

*** This is an example of why, as I monitor my trade performance, I pay least attention to gain/loss percent. I am much more concerned about my win/lose trade ratio, which supports the idea that consistent small gains add up.
Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.