DO OR DIE: Calls or puts?

06/23/2022

The last few sessions have put investors on edge… literally.

You can’t tell if the indices are setting up for a reversal or just pumping for the next leg down.

Remember yesterday?

Here’s footage of everyone that bought SPY calls at the open:

(Source: tenor.com)

However… this makes for extreme profits if you’re on the right side of the trade, particularly if you’re trading options…

And right now, I’m pricing out Fluor Corp. (FLR):

We’re on the daily going back to November of 2021.

If you were to zoom out, you’d see that this is the third leg up since the Covid meltdown.

And whether or not the “Rule of 3” holds true has yet to be seen… This one’s tough.

The Standard Deviation Channel makes one thing clear: The trend is up.

…For now…

More recent levels of Support are breaking down and you can see this with the red channel and now, the gray channel…

When the share price is inside the channel and has no clear relative direction, the channel goes blank. So FLR is in the hot seat.

Resistance is sitting at ~$25.00 and a break below the channel at ~$23.70 shows more downside to around $20.00.

This goes one of two ways though…

  1. Repeat the previous pattern with a double tap of support
    OR
  2. Breakdown

I’m less bullish when the share price is below the 8, 13, and 21ema’s (red arrow).

The Squeeze Trading Tool 1.2A built by Chris Hood remains short and appears to be showing continued weakness… How weak is the question.

I’ll take puts on a downside break of the previously mentioned levels and calls above $25.75.

(A straddle could work here as well.)

Aside from short term trades, I still like FLR long term.

Keep moving,

(Disclosure: I hold no position in FLR but intend to initiate a position in the next 30 days.)

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.

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