The trader who sold the 185 calls last week has rolled their position to next week's expiration, continuing to sell calls. Can you guess which strike they sold?
$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$
In my article on Monday, I mentioned the broad market would likely trade sideways these two weeks into 5/17 expiration. But after 5/17, we have Nvidia's earnings. The semiconductor sector has been rangebound near-term but with upside expectations further out. I noticed a trade in SOXL a couple days ago that aligns with this view:
Sell $SOXL 20240517 47.0 CALL$
Buy $SOXL 20240531 47.5 CALL$
I won't analyze Nvidia separately, as the SOXL call spread lays it all out. Next week's key level remains 920, with a downside floor tentatively at 850.
Truth be told, the sideways tech action this week has been quite boring, but the trading playbook is straightforward: sell calls on rips, close calls and sell puts on dips. My trading activity has actually picked up compared to prior weeks.
One operational point to note: regardless of whether I'm selling calls or puts, I've been sticking to the current week's expiration.
Next week's game plan will likely be more of the same bearish bias. While many may be hoping for a repeat of the 4/19 Nvidia capitulation, the current setup doesn't support that. We'll have to see if institutions ramp up the pressure mid-week. But I don't think they'll want to flush it all the way to 800 to give retail an attractive entry ahead of earnings.
You can start lining up put sales for next week like Microsoft, Nvidia, Apple. Other decent put sale candidates include CAT, GE, JPM, CRM, QCOM, WFC. I ran the numbers and the win rates look quite high.
$MSFT 20240517 412.5 PUT$ $CAT 20240517 350.0 PUT$ $GE 20240517 160.0 PUT$ $JPM 20240517 197.5 PUT$ $CRM 20240517 275.0 PUT$ $NVDA 20240517 870.0 PUT$ $QCOM 20240517 180.0 PUT$ $WFC 20240517 61.0 PUT$
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looks like downtrend continues for TSLA