There are a few stocks on our radar this week for potential trade setups. The crypto market continues to look for direction yet there is always a trade somewhere. This is where diversity in trading provides opportunities. The one we are really looking at is Activision.
ATVI (Activision) Weekly:
After the sell off two weeks ago, which was likely a result of EA sports delaying the release of their Battlefield video game, the overall space pulled back as a whole. This news had nothing to do with Activision. A receding tide lowers all boats often and this is one on our radar for a trade.
We are looking for a break of 74.00 for an opportunity. This is based on our three requirements for a trade. Mid to longer term target 90.75. A break of 71 would imply there is further weakness in the space and will step aside for the time being.
In the short term we can look for a retest of the previous high just below 82.00. A break of 71.0 would imply further weakness and a retest of the 68 area. With the market still very bullish and online gaming growth increasing this is one of the stocks we can look for a longer term options trade. As mentioned above a push through 71.00 would imply additional weakness and look for a failed broader term low around 67.50.
We are looking at shorting the 21 Sept 74.00 PUT around $1.75. The 19 Oct 75.00 PUT offers twice the premium collected at 3.60 but also more risk with an S&P that is subject to pulling back off its high. The 0.55 delta of the 75 October strike offers more reward then the shorter term Sept PUT. This is up to the individual trader.
Trading multiple markets provide opportunities. In lieu of forcing trades in a market that is unfavorable, like metals and cryptos right now, we can look at markets that provide better trade opportunities. The gaming space is an area we want to invest in for the long term. Pullbacks in the market offer an opportunity to start a small position or trade into a position. This also offers the opportunity for a shorter term swing trade.
We will update for our premium and expert trade members if and when we issue a signal.