The S&P 500 E-mini futures are up 2.23% year-to-date
It wasn’t long after last month's article came out that the market found its sellers. On April 1, /ES began its pullback that found buyers at $4,963.50. Then buyers took over again and pushed us back up to where we are today. The current price reflects about a 50% retrace of the down move.
The /ES currently finds itself 3.62% below all-time highs. Recent price action from $4,960 to $5,000 indicatesbuying support. A retest of $4,960, and possibly $4,930, makes sense before buyers rally back to all-time highs.
A note on earnings trades
To capture the bulk of the volatility of earnings announcements, earnings trades are often executed either the day before or on the day of the earnings announcement. However, earnings trades can also be placed days or weeks before an earnings event, which could lead to early profit taking.
Alternatively, placing a trade shortly after an earnings announcement can be a strategic choice to circumvent the binary nature of the event. Evaluate each trade in a way that enables you to execute the position that matches your strategy.
If you're considering a trade going into an earnings event, one approach is to initiate the position in the monthly options contract that follows the earnings event. This strategy offers flexibility. Should you need to defend your position—perhaps because of unexpected market movements—you have the choice to “roll” it out to the subsequent monthly options. Rolling out the position in this way enables you to extend its duration and potentially collect more premium, providing a buffer against market volatility.
Top 10 stocks to watch in March 2024
Qualcomm (QCOM) – May 1, After the close
Wayfair (W) – May 2, Before the open
Apple (AAPL) – May 2, After the close
Coinbase (COIN) – May 2, After the close
DraftKings (DKNG) – May 2, After the close
Disney (DIS) – May 7, Before the open
Uber (UBER) – May 8, Before the open
Shopify Iowa OP) – May 8, Before the open
Applied Materials (AMAT) – May 16, After the close
Nvidia (NVDA) – May 22, After the close
1. Qualcomm (QCOM)
QCOM designs and markets wireless telecommunications products and services. QCOM is currently up 18.26% year-to-date. Its IVR is 83.9, with May IVx at 47.2, June IVx at 37.2, and its liquidity is rated 3 out of 4 on the tastytrade platform.
QCOM is a slightly expensive product to trade so most accounts will want to place defined risk trades. However, a one-standard-deviation strangle does set up well. 25-delta five-dollar wide iron condors also set up well. 35-delta five-dollar wide directional spreads are also an option.
2. Wayfair (W)
W operates an online platform for home goods and furniture retail. W is down 14.62% year-to-date. Its IVR is 54.6, with May IVx at 96.3, June IVx at 77.2, and its liquidity is rated 3 out of 4 on the tastytrade platform.
W is currently a less expensive stock to trade and small to medium-sized accounts can consider undefined risk positions. A one-standard-deviation strangle sets up well, and 25-delta five-dollar wide iron condors set up well, too.
3. Apple (AAPL)
AAPL develops and sells consumer electronics, computer software, and online services. AAPL is down 6.55% year-to-date. Its IVR is 71.8, with May IVx at 32.7, June IVx at 27.6, and its liquidity is rated 4 out of 4 on the tastytrade platform.
AAPL is an expensive stock to trade, so most accounts will want to place defined risk trades. However, larger accounts can consider undefined risk positions. A one-standard-deviation strangle sets up OK. 25-delta five-dollar wide iron condors set up decently, too. Directional spreads can be set up in either direction with your preference of risk.
4. Coinbase Global (COIN)
COIN provides a digital platform for buying, selling, transferring and storing digital currency. COIN is up 29.65% year-to-date. Its IVR is 76.9, with May IVx at 107.1, June IVx at 98.5, and its liquidity is rated 3 out of 4 on the tastytrade platform.
COIN is a very expensive stock to trade, so the vast majority of accounts will want to place defined risk trades. 22-delta five-dollar wide iron condors set up well. You can spread your wings farther if you would like to take on more risk. The same can be done with directional spreads, with your preferred amount of risk.
5. DraftKings (DKNG)
DKNG offers sports betting and gaming technologies related to fantasy sports and other betting activities. It is up 24.58% year-to-date. Its IVR is 69.4, with May IVx at 76.1, June IVx at 57.3, and its liquidity is rated 4 out of 4 on the tastytrade platform.
DKNG is a cheaper product to trade, so smaller accounts can consider undefined risk positions. A 20-delta strangle sets up well. 25-delta five-dollar wide iron condors set up, too.
6. Disney (DIS)
DIS operates as a diversified international family entertainment and media enterprise. It is up 24.97% year-to-date. Its IVR is 74.1, with May IVx at 40.8, June IVx at 31.1, and its liquidity is rated 4 out of 4 on the tastytrade platform.
DIS is a medium-priced stock to trade, so medium and larger accounts could consider undefined risk positions. A 20-delta strangle sets up well. 25-delta five-dollar wide iron condors also set up well. 35-delta directional spreads also set up decently if you have a directional assumption.
7. Uber (UBER)
UBER provides a platform for ride-hailing, food delivery and freight transport services. UBER is up 12.51% year-to-date. Its IVR is 74.7, with May IVx at 56.1, June IVx at 45.2, and its liquidity is rated 4 out of 4 on the tastytrade platform.
UBER is a cheaper product to trade, so smaller accounts can consider undefined risk positions. A 20-delta strangle sets up well. 25-delta five-dollar wide iron condors set up well, too.
8. Shopify (SHOP)
SHOP provides a cloud-based commerce platform for small and medium-sized businesses. SHOP is down 5.81% year-to-date. Its IVR is 80.1, with May IVx at 77.4, June IVx at 57.9, and its liquidity is rated 3 out of 4 on the tastytrade platform.
SHOP is a cheaper product to trade, so smaller accounts can consider undefined risk positions. A 20-delta strangle sets up well. 25-delta five-dollar wide iron condors set up well, too. 30-delta direction spreads are also an option if you have a directional assumption.
9. Applied Materials (AMAT)
AMAT supplies equipment, services and software for the manufacture of semiconductor chips. AMAT is up 28.05% year-to-date. Its IVR is 75.5, with May IVx at 47.1, June IVx at 40.6, and its liquidity is rated 3 out of 4 on the tastytrade platform.
AMAT is an expensive stock to trade, so most accounts will want to place defined risk trades. However, larger accounts can consider undefined risk positions. A one-standard-deviation strangle sets up okay. A 20-delta or 25-delta, five-dollar wide iron condor sets up decently. Directional spreads can be set up in either direction with your preference of risk.
10. Nvidia (NVDA)
NVDA designs graphics processing units (GPUs) and related technology for gaming and professional markets. NVDA is up 77.7% year-to-date. Its IVR is 78.7, with May IVx at 50.7, June IVx at 58.7, and its liquidity is rated 3 out of 4 on the tastytrade platform.
NVDA is a very expensive stock to trade, so the vast majority of accounts will want to place defined risk trades. 20-delta ten-dollar wide iron condors set up well. You can spread your wings if you would like to take on more risk. The same can be done with directional spreads, with your preferred amount of risk.
Ryan Sullivan is an active options and forex trader and programming producer for the tastylive network.
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