Trading Recap for Tuesday 8/8/23

Trade 1: $MSFT 325p

• Reasoning: key level breakdown

• Entry: 2.72

• Exits: 3.25, 3.53, 3.95, 3.00

• Size: medium

• Profit in percent: +45%

Explanation:

Today, MSFT started with a gap down into the key 326.50 support level we have been keeping a close eye on. The game plan for this was simple. We want to see MSFT pop at the open into 328-328.50 where we see a rejection and a breakdown under 326.50. I also wanted to wait at least 15 minutes to get an idea of the day. This played out perfectly and when MSFT broke 326.50 we entered puts targeting 325 and then 323.50. The volume on the daily was the main focal point for me. From earnings, we see the volume on the daily favoring the short side as the bears were fully in control.

Chart:

Trade 1: $BA 242.50c

• Reasoning: relative strength, key level reclaim

• Entry: 1.88

• Exits: 1.20

• Size: Small

• Profit in percent: -36%

Explanation:

Today, BA was showing significant relative strength as it was approaching the key 240 resistance. I liked the intraday strength and I also liked how the market was trying to find support at the lows. When a name shows relative strength, its best to either have the market setting up for a bounce or the market also pushing. When BA crossed 240, I entered calls with a small size but quickly failed to hold 240 and sold off. The premiums on BA were noticeably weaker following the 240 break and they continued to lose value even though BA was consolidating $1 below 240. This told me the move was over and I took the smaller loss on it.

Chart: