Trade Recap for Tuesday 7/25/23

Trade: $QQQ 7/26 380c over 378

• Reasoning: key level reclaim of 378 paired with QQQ having relative strength

• Entry on the contract: 2.00

• Exit on the contract: 2.22

• Profit in percent: 11%

Explanation

Today, the stock QQQ gapped up above the 376 support level that it had formed from Thursday to Monday 7/24/23. This showed me that the buyers were in control at the start of the day. If enough buyers supported the stock at 376, I wanted to buy Calls. When QQQ reached 378, I took this as confirmation to buy the 380c option. However, the premiums on the contracts didn't move as I had expected, so I only made a small profit on the trade. After I sold my position, QQQ went down a bit and printed a higher low which triggered a move into 380. The contracts reached a high of 60%.

Link to the chart outlining entries and exits.